Reuters – Shipping climate plan delay could sink clean fuel projects
- Vote to delay agreed IMO climate plan means 100 ammonia and methanol projects now uncertain
- Shipping GHG emissions could rise 50% by 2050 without action
- IMO plan was expected to raise $11-12 billion annually for small island states
- The EU’s FuelEU Maritime regulation sets decreasing greenhouse gas limits for ships calling at EU ports
October 27 – As the Trump administration dismantles climate action at home, it has demonstrated that it’s also prepared to try to derail global attempts to cut emissions.
There had been widespread optimism that members of the International Maritime Organisation (IMO) would sign off on an agreement for a global fuel standard and a global price on shipping emissions, which had been thrashed out in April.
But sustained U.S. threats of retaliatory measures, including sanctions, visa restrictions and commercial penalties, against nations supporting the proposed Net Zero Framework led to a vote to delay the decision for a year.
There is an urgency to decarbonise shipping: the industry uses dirty fuels and accounts for 3% of global emissions today, but that could rise by as much as 50% by 2050 without industry action. The challenge is exacerbated as political tensions force ships to reroute.
The IMO’s Net-Zero Framework, which has been years in the making, is intended to progressively lower permitted greenhouse gas emission intensity levels, so incentivising international shipping to switch to cleaner fuels, and adopt efficiency measures, such as speed optimisation or weather routings.
Rather than a flat levy on emissions (as many had advocated), the framework involves a ratcheting of fees for vessels that miss targets and rewards for those that adopt cleaner fuels.
Various analyses suggest the deal, which would have come into force in 2028 had it been ratified, would lead to a 10% reduction in emissions on 2008 levels by 2030, compared with the IMO’s target of “at least 20% – striving for 30%”.
In a statement following the collapse, the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping said:
The case for a global framework is stronger than ever and urged member states to use the year to advance the guidelines for action.
Many of the fine details have yet to be agreed, such as the level of rewards for first-movers, which fuels will count, clarity on the lifecycle emissions assessment of fuels and the governance and use of funding for developing nations.
E-fuel producers have also been calling on the IMO to include a specific stimulus for green hydrogen-based fuels, which are under-incentivised compared with LNG and first-generation biofuels.
A year’s delay may offer the time to resolve some of those questions, but the ability of the industry to make stable investment decisions is “massively damaged”, observes Tristan Smith, who heads University College London’s Shipping and Oceans Research Group. “It was already pretty difficult because the Net-Zero Framework was quite a hard regulation to read, but (now) its specific detail is uncertain.”
It could result in added cost to transport, he says, “which is ironic, given that those who didn’t want this to go through were apparently worried about the (cost) impacts”.
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Reuters – Shipping climate plan delay could sink clean fuel projects, source
