A bungled Marine Environment Protection Committee (MEPC) meeting posed more questions
Apart from no mention of curbing maritime emissions, the MEPC did not approve the International Maritime and Research Board’s (IMRB) proposal from the World Shipping Council (WSC) and International Chamber of Shipping (ICS). The motion involved a US$2 per tonne marine fuel tax collected by the IMO and distributed as a research fund to help decarbonise shipping.
Are stakeholders prepared to invest?
Early December, climate change academic Dr Tristan Smith from University College London pointed out that though the MEPC did not endorse the International Chamber of Shipping (ICS)’s proposal to aim for net zero, he was positive about the proposal’s adoption of zero emissions policy by 2050. He explained, “A powerful majority wanted some type of zero by 2050, and is a majority that normally would be expected to only strengthen over the period to 2023. However, transitions occur because of investment.
“Shipping needs massive investments to unlock technologies and energy supply chains that warrant rapid developments. These investments will primarily come from the private sector, including diversion for investment that is currently heading to fossil fuels, and liquefied natural gas (LNG)”. He believed many were investing in zero-emission-ready ships that will be able to operate on zero emission fuels, or will be capable of being adapted to run on new fuels.
Dr Smith’s take rang true as the world’s top shipbuilders were exploring LNG and ammonia-powered vessels to address the climate crisis. However, this is from the shipowners’ perspective. Would operators benefit from this movement? In other words, would cargo owners be prepared to pay premiums for these vessels for shipments, or remain frugal to be financially solvent.
Peter Sand, Chief Analyst at Xeneta and former Chief Shipping Analyst from BIMCO, concurred the industry is understandably reluctant to invest in the search for the maritime fuel of the future, its eventual production and distribution without an international legal and regulatory framework. Jan Hoffmann, Head of Trade Logistics at United Nations Conference on Trade and Development (UNCTAD), stressed this framework must be decided soon to provide a predictable environment for private sector investment in lower-emissions ships, port infrastructure, energy generation, and fuel distribution. He added, “If investments are delayed, there is a serious risk of shipping capacity shortage, which we have witnessed resulting in exorbitant freight rates.”
Marine Online Media Team
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