THE maritime industry faces a hurdle in its journey toward decarbonisation due to the absence of a sufficiently high carbon price, which some feel is crucial for incentivising the shift to zero-carbon fuels, reports New York's Journal of Commerce.
The uncertainty surrounding the implementation of such pricing raises questions about how the industry will progress toward achieving the revised goal of net-zero emissions around 2050, as set by global regulators.
Currently, there is no globally established mechanism for carbon pricing, and despite carriers and forwarders offering low-carbon fuel options to beneficial cargo owners (BCOs), the uptake has been minimal, limited to a few early adopters.
Consequently, the financial burden of making these fuels available falls largely on carriers, who express concerns about funding the energy transition indefinitely.
Despite around 200 BCO tenders for the 2023-24 contract year, including requirements for CO2 mitigation such as biofuel, the absence of these clauses in the final contracts indicates the challenges faced.
Using biofuel at current prices significantly increases transit costs, doubling the expense of an Asia-Europe shipment from US$1,000 to $2,000 per container, according to a forwarder.
While 4,000 global companies have publicly committed to reducing Scope 3 emissions, these commitments are not translating into the ocean shipping sector.
Shippers resist paying freight rates higher than market prices to achieve sustainability goals.
Many experts believe implementing a globally enforceable carbon tax is the most effective way to address this issue.
However, this tax must be substantial enough to offset the costs of traditional bunkers against zero-carbon fuels to narrow the gap.
Without such measures, the playing field will remain uneven, relying on individual companies to take the lead.
The potential for a meaningful carbon tax gained momentum in July when member states of the International Maritime Organisation (IMO) established a more ambitious greenhouse gas (GHG) policy.
This policy aims for the maritime industry to achieve net-zero GHG emissions by or around 2050, with interim targets, including a 20 per cent reduction in total GHG emissions relative to 2008 levels by 2030 and a 70 per cent reduction by 2040.
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