As the maritime sector has vowed to halve global shipping's greenhouse gas emissions by 2050 and might even raise the target to a net zero emission goal next year, several experts suggest that a carbon pricing scheme should be implemented for bunker fuels, according to a report by S&P Global Platts.
“Many maritime stakeholders are already calling for this level of ambition to be raised to full decarbonization of the sector by the middle of the century,” said Katharine Palmer, shipping lead for the UN High-Level Climate Action Champions.
According to the International Maritime Organization’s research, the shipping industry is responsible for around 940 million tonnes of carbon dioxide annually, which is at least 2.5% of the world’s total emissions. If the global marine transportation were a country, it would have ranked 6th in terms of carbon emissions, even above Germany.
“Analysts concur that the next regulatory framework would likely need to include a market-based mechanism to achieve climate targets in an economically efficient way,” Palmer added, pointing to carbon pricing as the most cost-effective way.
Ingrid Sidenvall Jegou, project director of the charity Global Maritime Forum, referenced statistics and indicated, a carbon price of between US$173/mt and US$264/mt would be required to achieve a 50% decrease in maritime emissions by 2050. For the sector to be fully decarbonized, a price of between US$191/mt and US$360/mt would be required.
“A route to zero emissions in the maritime sector is still achievable,” she added, “but action must be made immediately.” By 2040, zero-emission fuels must be the dominant fuel choice, thus worldwide policy frameworks that accelerate and facilitate a just, equitable, and successful transition must be developed."
A carbon price, according to experts, would not only make alternative fuels more competitive, but it would also produce funding to support the energy transition, climate-vulnerable communities, and those who stand to lose out. Carbon earnings generated by international shipping might be re-invested in the industry to improve trade logistics and reduce maritime transportation costs by improving port facilities, trade facilitation, and shipping connectivity.
Despite these advantages, Jan Hoffmann, head of trade logistics for the UN Conference on Trade and Development, predicts that some countries will be hesitant to adopt a carbon price in the sector. Nonetheless, he was optimistic that they would recognize that the market-based approach was the least expensive one among the several possibilities, which included imposing a speed restriction and barring specific technologies.