Global Shipping CEOs Advocate for Maritime Decarbonization ‘Cornerstones’ at COP28
CEOs of prominent shipping lines globally came together at the UN Climate Change Conference, issuing a collective declaration advocating the implementation of four key pillars to drive decarbonization in maritime operations. They called upon the International Maritime Organization (IMO) to establish a regulatory framework that would accelerate the industry’s transition to sustainable, green fuels.
The proposed cornerstones, as outlined in the joint declaration by CEOs of leading shipping lines, include establishing an end date for the construction of new ships exclusively reliant on fossil fuels. Additionally, the declaration advocates for a clearly defined timeline for greenhouse gas (GHG) intensity standards. An effective GHG pricing mechanism is identified as another cornerstone, aiming to make green fuels economically competitive with traditional fuels during the transition period.
The CEOs also propose a vessel pooling option for GHG regulatory compliance and emphasize the importance of a well-to-wake GHG regulatory foundation. Notable signatories to this declaration include CEOs from major global shipping companies such as CMA CGM, Hapag-Lloyd, MSC, and Wallenius Wilhelmsen, alongside A.P. Moller-Maersk.
These cornerstones aim to foster investment confidence in both new ships and fuel supply infrastructure while facilitating the transition to environmentally sustainable practices in the maritime industry.
“With low initial volumes of green fuels, any inflationary effects are minimized. The mechanism must also feature an increasing regulatory incentive to achieve deeper emissions reductions,” the declaration said.
In addition to covering the “green balance fee,” the revenue generated by the proposed mechanism is suggested to be directed towards a Research, Development, and Demonstration (RD&D) fund. Furthermore, investments in developing countries are emphasized to ensure a just transition for all, according to the joint declaration.
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The declaration also advocates for a vessel pooling option for GHG regulatory compliance, where the collective performance of a group of vessels is considered instead of focusing solely on individual ships. This approach is seen as a means to direct investments where they can achieve the most significant greenhouse gas (GHG) reduction, thereby ensuring the immediate commercial viability of ships capable of achieving substantial emissions reductions.
Additionally, the declaration underscores the importance of a well-to-wake or lifecycle GHG regulatory basis, aiming to align investment decisions with climate interests and minimize the risk of stranded assets in the maritime industry.
