Leading shipping lines have issued a joint declaration at COP 28 calling for an end date for fossil-only powered newbuilds and urging the International Maritime Organization (IMO) to create the regulatory conditions to accelerate the transition to green fuels.
The signatories – A.P. Moller – Maersk, CMA CGM Group, Hapag-Lloyd, MSC and Wallenius Wilhelmsen – call for the establishment of four regulatory cornerstones. These include an end date for new building of fossil fuel-only vessels and a clear GHG Intensity Standard timeline to inspire investment confidence, both for new ships and the fuel supply infrastructure needed to accelerate the energy transition.
Another “cornerstone” is an effective GHG pricing mechanism to make green fuel competitive with black fuel during the transition phase when both are used. This can be done by distributing the premium for the green fuels across all the fossil fuel used. With low initial volumes of green fuels any inflationary effects are minimised. The mechanism must also feature an increasing regulatory incentive to achieve deeper emissions reductions. Furthermore, beyond covering the ‘green balance fee’, revenue generated by the mechanism should go to a research, development, and demonstration (RD&D) fund and to investments in developing countries to ensure a just transition that leaves no one behind.
The signatories also put forward 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, ensuring investments are made where they achieve the greatest GHG reduction and thereby accelerating decarbonisation across the global fleet; as well as a well-to-wake or lifecycle GHG regulatory basis to align investment decisions with climate interests and mitigate the risk of stranded assets.
The declaration was described by Wallenius Wilhelmsen as an “unprecedented collaboration between leaders of global shipping lines to decarbonise the industry”. With the declaration, the signatories have expressed their shared conviction that regulation can play a key role in mitigating the cost of the green transition as well as the risk of extreme weather events.
Global temperatures are breaching critical levels, creating more frequent and devasting results. Therefore, the importance of shipping achieving IMO’s 2030, 2040, and net-zero 2050 GHG targets is very clear. “The only realistic way to meet those targets for an industry that accounts for 2-3 percent of global GHG emissions is to transition from fossil to green fuels at scale and at pace,” said the signatories.
Vincent Clerc, ceo of A.P. Moller – Maersk, explained: “A.P. Moller - Maersk wants to accelerate the green transition in shipping and logistics and a crucial next step is to introduce regulatory conditions which ensure that we create the most greenhouse gas emission reductions per invested dollar. 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. 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.”
