7 December 2023 (Lloyd's List) - CONTAINER shipping companies want the International Maritime Organization to let them pool their fleets’ emissions performance to comply with an upcoming green fuel standard.
The World Shipping Council, the box line trade body, has asked the IMO to set its greenhouse gas fuel standards upfront so carriers know how to invest from now to 2050, and called for “an effective economic measure or GHG price”, in a list of requests ahead of next year’s MEPC81 environment meeting.
Pooling compliance would let companies count the GHG impact of green fuels across a fleet of ships instead of counting each ship’s impact. The WSC said this would let companies
invest in green technologies and “minimise spending on incremental efficiencies wit only short-term impact”.
“A flexible approach to pooling will enable investments that would not be feasible if each and every vessel must perform at the same level at the same time and will help smaller carriers transition more efficiently,” the group said.
It added: “All ships in the global fleet cannot be replaced at a single point in time, so we need a mechanism that enables owners and operators of lower, near-zero and net-zero ships to spread the credit and benefits across multiple ships. This provision is essential to the energy transition in the maritime sector.”
The IMO will adopt a global fuel standard as its technical mid-term measure in 2025 that will likely require vessels to reduce their GHG intensity over the years.
The fuel standard could be a similar measure to the European Union’s FuelEU Maritime legislation, according to industry sources.
EU legislation requires vessels calling at EU ports to reduce greenhouse gas intensity for energy used on board by 2% from 2025, 6% from 2030, 14.5% from 2035, 31% from 2040, 62% from 2045 and 80% from 2050.
The WSC said the IMO should decide on respective GHG intensity reduction levels upfront, adding that current submissions propose establishment of sequential GHG-intensity standards that apply for specific intervals between entry into force and 2050.
“Defining each of the GHG-intensity steps upfront is critical to establishing the needed demand signals and subsequent planning. These signals are important both to shipowners and operators and to energy providers that will need to decide when and what fuels are to be produced,” it said.
The council said the economic measure should send a big enough demand signal to energy producers to ensure shipping has access to low or zero-emission alternative fuels.
Some member states proposed a flat rate levy as the economic measure, while others proposed a fund and rebate mechanism.
“We’re frankly agnostic on the form of the regulations. It’s less important, what form the regulatory measures take, and far more important what the substance of those regulations is,” said WSC chief executive John Butler.
The WSC’s submission came a few weeks after industry groups the International Chamber of Shipping and the International Bunker Industry Association made a similar submission to request a “simple technical measure” complemented by pooling.
The IMO will conduct a comprehensive impact assessment of potential economic measures and it will publish an interim report in March 2024 to be discussed at the Marine Environment Protection Committee 81.
