George Collard of global energy and commodity price reporting agency Argus Media on Monday (23 November) published an article on the considerations behind International Maritime Organisation’s decision to back a levy proposal to establish a fund for decarbonisation:
The International Maritime Organisation (IMO) has agreed to give further consideration to the creation of a $5bn fund to develop zero-carbon marine fuels, which would be backed by a fuel levy.
The International Chamber of Shipping (ICS) proposed a $2/t levy on marine fuel purchases last year to create a fund for the research and development of zero-carbon marine fuels. The fund would be supervised by the IMO and managed by a new International Maritime Research and Development Board (IMRB).
The organisation’s marine environmental protection committee (MEPC) — which oversees the IMO’s environmental regulations — met last week.
“Following discussion, the committee acknowledged the proposal and noted diverging views and concerns on the proposed mechanism, with regards to various administrative, legal and governance aspects,” the IMO said.
“The committee noted that the proposal would require more detailed consideration, including of the potential impacts on states, before taking any decision,” it said.
“We recognise the unprecedented nature of our proposal, but unless the IMO is willing to take forward the industry’s offer of $5bn to accelerate research and development (R&D) within the IMO regulatory framework, it is really difficult to see how the industry can make the IMO’s 2050 target,” ICS deputy secretary general Simon Bennett said.
Other supporters of the levy include shipping association Bimco, the Cruise Lines International Association, the World Shipping Council, and international associations representing the tanker, cargo, and ferry industries.
The IMO hopes to draft firm emission reduction plans in 2023, but currently targets reducing CO2 emissions from shipping by as much as 70pc by 2050 compared with 2008 levels. The MEPC passed short-term plans to cut carbon intensity by 2030.
The IMO’s MEPC also passed a ban on the carriage and use of Heavy Fuel Oil (HFO) in the Arctic after draft plans were drawn up in February. The use, and carriage for use as fuel, of fuel oil having a density higher than 900 kg/m³ at 15°C, or a kinematic viscosity higher than 180 mm²/s at 50°C will be prohibited in the Arctic under the new IMO regulation.
But the Clean Arctic Alliance (CAA) slammed the ban, which it says is “ridden with loopholes”. The IMO’s Arctic plans have previously been criticised by the International Council of Clean Transportation (ICCT).
Vessels flagged to Arctic nations or those with double hulls or protected fuel tanks will be exempt from the HFO ban until 2029.
Photo credit and source: Argus Media
Published: 24 November, 2020
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