Thursday, 10 October 2024
Source: IMO
The International Maritime Organization (IMO) is working towards setting global rules to drive the shipping industry towards its net-zero emissions target by 2050. This initiative is critical to providing a path forward for industry players. It was therefore good to see solid progress made this past week in London as IMO members came together and reached a consensus on a framework to implement a fuel tax or levy and establish a global fuel standard, aimed at encouraging the production and adoption of low-carbon fuels in the shipping industry.
However, the negotiations ahead are expected to be complex and difficult. Many stakeholders, including shipowners, analysts, and environmental groups, remain cautious about the final outcome due to the detailed discussions required over the next six months. The challenge lies in aligning the interests of member states, investors, and environmental advocates, while ensuring a just and equitable transition. Not to mention time is not on the IMO’s side; reaching a consensus by next April is crucial to meeting both climate targets and shipping efficiency standards.
Source: IMO
How can the IMO member nations finalize this framework in the time needed to meet the IMO’s stated ambitions?
Developing a punitive framework based on levies or taxes when there are few viable alternatives to reducing emissions will continue to face entrenched opposition among members. While there is already broad agreement on the idea of a levy, Key stakeholders will need to come together to lay down measures that help reduce the cost gap between conventional marine fuel oil and zero-emission fuels, thereby making the adoption of green fuels viable for the industry. This in turn will help the framework gain industry wide support for levies as those responsible for emissions will have alternatives for reducing their economic burdens.
Patience will be required as more visibility into technology and supply chain logistics for alternative fuels is needed. In addition, efforts must be made to ensure the inclusion of climate-vulnerable countries in the discussions. Though the path ahead is not without challenges, there is optimism from many stakeholders.
Comments