SIMIC

WHAT world shipping needs from regulators to meet net-zero emissions by 2050 is greenhouse gas fuel standards, a carbon tax, regulations based on fuel well-to-wake life cycle and wider vessel pooling, reports New York's Journal of Commerce.

In a white paper submitted to the UN's International Maritime Organisation (IMO) at COP28 eco meet in Dubai, World Shipping Council president and CEO John Butler outlined measures needed to produce an effective greenhouse gas agreement.



"Liner carriers are committed to delivering on the 2050 net zero target and are already investing in renewably propelled ships," he noted. "To ensure there are renewable fuels available to run those ships in a competitive manner, energy providers must see regulations written in the next two years that demonstrate sufficient demand for new fuels to justify the massive investments needed in the immediate future."



Given the challenges and widely differing agendas of the IMO member states, achieving regulatory consensus within a two-year timeframe will test the negotiating skills - and likely the patience - of new IMO secretary general Arsenio Dominguez.



Another enormous challenge is convincing cargo owners of the need to pay more to ship their goods because of costly emission standards.



After two years of record high rates there is little appetite for premium green shipping products such as those offered by Hapag-Lloyd and Maersk.



Hapag-Lloyd expects just one per cent of its annual volume to be transported via its biofuel ShipGreen product, while Maersk in 2022 moved just two per cent of its volume, or about 480,000 TEU, via its ECO Delivery biofuel offering.



This lack of willingness to pay was highlighted by Sea-Intelligence Maritime Analysis.



"Most shippers seem more focused on taking advantage of the low freight rates, than in paying extra for green fuel options," Sea-Intelligence said. "And with the carriers still locked in a competitive price war, which has driven them into red ink, there appears to be quite a gap between the stated ambitions and the present market realities."