In the struggle for a World Shipping Council at the IMO, WSC advances proposal for Green Balance Mechanism with new submission to the IMO.
The World Shipping Council (WSC) has further developed its Green Balance Mechanism. It is a proposed regulatory measure to ensure that shipping achieves its net-zero target by 2050 in an efficient, fair and equitable manner.
Around 60% of all newbuildings that will be delivered by 2030 are reportedly prepared to use the most environmentally friendly fuels. However, these fuels are scarce and many times more expensive than fossil fuels.
“For the energy transition in shipping to succeed, green marine fuels must be available on a large scale, which will require billions of euros of investment from energy producers,” says WSC President Jo Kramek. The initiative is supported by major container lines such as CMA CGM, Hapag Lloyd and Maersk as well as large car carriers such as Wallenius Wilhelmsen.
WSC wants CO2 levy on fossil fuels
The WSC proposal, therefore, aims to levy a CO2 tax on every tonne of fossil fuel consumed and use this revenue to subsidise the price of green fuels such as methanol and ammonia. This is intended to close the existing price gap.
The emission reduction that must be achieved with a particular fuel to receive an allocation would follow the IMO targets, starting with a 65% reduction to reach the net zero target for 2050.
The Green Balance Mechanism also provides for the creation of an “IMO Net Zero Fund” to raise funds for research, development and demonstration projects as well as for climate change mitigation initiatives.
An initial proposal was submitted by the WSC in February in the run-up to a meeting of the IMO’s Environment Committee (MEPC). The talks are to be resumed in the fall.
The World Shipping Council is a liner shipping association with offices in Brussels, London, Singapore and Washington. The non-profit organization was founded to exchange ideas with political decision-makers and industry associations.
