1 December 2023 (Lloyd's List) - THE governments of France, Denmark and South Korea, with the support of leading container lines, have issued a joint declaration with commitments to speed up the decarbonisation of maritime transport.

The declaration, released during the COP28 meeting in Dubai, underlined the importance of the shipping industry and governments’ joint efforts to achieve the goals of the Paris Agreement in limiting global warming to 1.5°C.

The signatories commit to “actively promote and co-operate within the International Maritime Organization for the establishment and entry into force from 2027 of a robust regulatory framework driving a globally effective and equitable progressive green transition of the shipping sector”.

It calls for a global goal-based greenhouse gas intensity standard to drive the decarbonisation pathway of the sector, while allowing for a flexible compliance mechanism for all ships to ensure a level playing field and incentivise the use of the most innovative fuels and technologies from the start.

It also reiterates calls for a global carbon pricing mechanism covering all aspects of emissions from ships, but one with a “predictable price” that would incentivise energy efficiency and reduce the price gap between fossil fuels and sustainable marine fuels.

This would be a step change from the only existing carbon pricing tool, the European Union’s Emissions Trading System, which has more volatile pricing. The price of ETS allowances is widely seen as too low to close the price gap with green fuels.

The shipping bosses called for an end date for ordering newbuildings that only use fossil fuels, and for a vessel pooling option for GHG regulatory compliance, where the performance of a group of vessels could count instead of only that of individual ships.

This would ensure investments were made where they achieved the greatest GHG reduction, accelerating decarbonisation across the global fleet.

They also have called for more ambitious targets for the scale of their fleets towards the “highest levels of ambition” of the IMO GHG strategy. That would see a 30% decrease in total emissions compared to 2008 by 2030, and/or the use of 10% of zero or near-zero fuels by 2030. The next phase would see an 80% emissions reduction by 2040 and reaching net-zero emissions by 2050.

The IMO’s strategy, revised in July, calls for 20% reductions by 2030 and 70% by 2040, but “striving for” the higher numbers the carriers chose in their statement.

“Being at the forefront of introducing lower greenhouse gas (GHG) emission ships underscores the chief executives’ commitment to the IMO GHG reduction objectives for 2030, 2040, and 2050,” the heads of Maersk, CMA CGM, Hapag-Lloyd, Mediterranean Shipping Co and Wallenius Wilhelmsen said in a release.

“As frontrunners, the chief executives are convinced that even closer collaboration with IMO regulators will produce the effective and concrete policy measures needed to underpin the investment within maritime shipping and its ancillary industries that will enable decarbonisation to occur at the pace required.”

In what they described as an “unprecedented action”, the companies called for a lifecycle regulatory basis to align investment decisions with climate interests, in order to mitigate the risk of stranded assets.

“Regulation can play a key role in mitigating the cost of the green transition as well as the risk of extreme weather events,” the statement said.

Meanwhile, the governments would endeavour to set up a global level playing field through international regulations in IMO to provide regulatory and framework conditions in support to industry initiatives, such as the development of R&D synergies and voluntary co-operation, and increasing fuel production and supply.

There was also support for a “just and equitable” climate transition of maritime industry. This could include actions to support implementation of the IMO GHG Strategy in developing countries, promotion and deployment of efficient solutions through bilateral cooperation, capacity-building initiatives, or financial contributions to IMO funds and programmes dedicated to decarbonisation.

“Climate change is a general concern not a matter of competition,” said CMA CGM chief executive Rodolphe Saadé.

“This sets an ambitious milestone for the decarbonisation of our industry. By collaborating with others, we each take a new step in our energy transition, while ensuring a collective level playing field and access to greener fuels for the industry.”

Hapag-Lloyd chief executive Rolf Habben Jansen added that a “collective responsibility” for a sustainable future was paramount.

“We believe that a regulatory framework and clear targets are crucial to accelerating the introduction of alternative fuels and reducing our carbon footprint,” he said.

Maersk, an early mover in decarbonisation which has long called for a global pricing mechanism, said introducing regulatory conditions that ensure the largest reductions per investment dollar was a crucial next step.

“This includes an efficient pricing mechanism to close the gap between fossil and green fuels and ensuring that the green choice is easier to make for our customers and consumers globally,” said chief executive Vincent Clerc.

“The momentum for green fuel is building and we are pleased to see strong partnerships across the industry as we continue our joint efforts of making decarbonisation in shipping successful.”

MSC chief executive Søren Toft welcomed the government involvement, which he said would be an essential element to reach the common goal and put an end to the delivery of vessels that could only run on fossil fuels.

“MSC has fully supported and committed to net decarbonisation by 2050, but without the full support from other stakeholders, particularly energy providers, it will be extremely difficult to meet those objectives,” he said.

“Today it feels like we are one step closer in this regard, but concrete supply of alternative fuels and globally recognised GHG pricing are essential to achieve our goals.”