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Shipping industry must upgrade environmental targets: IMO chief in COP26

The International Maritime Organization’s secretary-general said the shipping industries must increase their climatic targets during United Nations Climate Change Conference. The IMO targets to cut greenhouse gas emissions by 50% by 2050. The reduction in emissions by the shipping industry should reduce to 40% by 2030. The political parties and the shipping and container industry stalwarts want the 2050 goal to reach 100% instead of 50%.

During the International Chamber of Shipping’s Shaping the Future of Shipping Conference at Glasgow, Kitack Lim said, “We must upgrade our ambition, keeping up with the latest developments in the global community”. The governments of the US, Denmark, and others showed their focus on the goal of reducing emissions to zero. Though the shipping industry is seeing some confusion and lack of consensus about targeting absolute zero. Some shipping and container trading platforms and companies are setting for the net-zero target. And some of the sources believe that IMO will try to keep global warming within the limit of 1.5C. They will attain this by keeping the shipping industry in check.

How will it be possible?

Kim said that a proposal of setting carbon content in marine fuel along with carbon pricing mechanisms has been proposed. The Marshall Islands and the Solomon Islands put forward a proposal of introducing a tax of $100/MT on bunkering fuel. It is CO2 equivalent but the IMO has not adopted it till date. The supporters of the proposal are optimistic of IMO passing it later in November at MEPC77. According to the DNV classification society, one metric ton of fuel oil emits 3.1MT of CO2 equivalent. This means $100/MT tax will add to the $300/MT bunker oil bill.

There are many opinions that are circling around like the levy should be taken or the market decides the CO2 price to make the miscreants pay for the polluting the environment. Jeremy Nixon, CEO of One Group, a container shipping line said that it would be mostly impossible to pass the increased prices onto the consumers. A flat-rate tax would remove the doubts and give clarity to the consumers. According to a source, the IMO leaders are trying to take the US in favor and avoid naming the carbon cost as tax. The US support may depend on the right market-based measures.

In a conference, during a panel discussion, Andrew Light, assistant secretary for International Affairs at the US Department says that the US supports the net-zero by 2050. He puts forward that the 50% greenhouse gas decrease by 2050 is not enough. Rolf Habben, CEO of Hapag-Lloyd, a container line says that measuring the carbon in fuel market-based steps would be better but taxes will make it easier to administer and keep the data.

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