Strategies for a new levy on the shipping industry to support net-zero goals

  • December 19, 2023
  • News

Leaders at Cop28 are discussing the urgent need to cut emissions and decarbonize the shipping industry to combat climate change.
The task is monumental as 90% of global trade relies on shipping.
The maritime industry heavily relies on fossil fuels, and although new vessels are being built to run on eco-friendly fuels, much more needs to be done. A maritime levy is being discussed, and the International Maritime Organisation (IMO) plans to reduce greenhouse gas emissions from ships to reach net zero emissions by 2050, with the commitment to adopt alternative fuels by 2030.

Arsenio Dominguez, the IMO’s Secretary-General elect stated that their member states have shown a strong commitment to reducing greenhouse gas emissions from the shipping sector and will ensure that the reduction requirements outlined in the strategy are met. These measures will be adopted in the autumn of 2025 and will come into force in 2027, making it a challenging period.

The archipelago nation heavily depends on shipping and boasts the world’s third-largest ship registry. However, it is taking the lead in decarbonizing efforts, to reduce emissions by 40% by 2030.

The Marshall Islands invested in research for sailing supply vessels and developed a Pacific Island Supply Vessel, equipped with a modern sail system and solar panels, with a 500 sqm sail area that can reach a speed of 12 knots, and has a hybrid transmission system and backup diesel generator for rough seas.

Albon Ishoda, the presidential special envoy for shipping, stresses the need for global industry commitment to decarbonizing. He called upon the global community to acknowledge the severity of the climate emergency and the need for more ambitious actions within the maritime industry. He further said that there should be persistent efforts to achieve a significant reduction in greenhouse gas emissions to protect the environment for future generations. A universal mandatory levy, based on scientific evidence, can be a crucial tool in compelling the maritime sector to decrease its carbon footprint. Also, he acknowledges the carriers who are making every effort to achieve net zero emissions by 2050 by investing in technologies.

This decision has been hailed as a landmark moment in the industry’s transition to more sustainable practices. In addition to developing technical solutions, a few organisations are working on creating urban markets for batteries, green hydrogen, and green ammonia. According to Ms Syrstad, the State Secretary to the Minister of Climate and Environment of Norway, supporting developing countries in their transition towards low and zero-emission shipping is vital for building a sustainable economy.