SINGAPORE - For the first time, the International Chamber of Shipping and other groups representing over 90 per cent of maritime trade are asking the International Maritime Organisation (IMO) to put a price on carbon dioxide emissions.
In a revolutionary joint submission to the world organisation, ahead of the Leaders Summit on Climate to be hosted by US President Joe Biden, the industry called on world leaders to quickly begin deliberations on how mandatory market-based pricing measures can be used to incentivise a shift away from carbon-heavy marine fuels.
This is in order to eliminate the 2 per cent of all global carbon dioxide emissions that the sector currently emits.
"To expedite development, the committee is requested to commence discussions on market-based measures as soon as possible and before 2023, with a view to taking some decisions," they said.
"While there are short-term greenhouse gas reduction measures, the magnitude of the challenge required to achieve the levels of ambition in the initial strategy requires that the committee undertakes discussions of critical measures in parallel, and not in a linear sequence... to move forward with the urgency that the challenge of decarbonising shipping requires."
The IMO has set a target to reduce total greenhouse gas emissions from international shipping by at least 50 per cent by 2050, and to achieve zero emissions as soon as possible within this century.
But the adoption of zero-carbon technologies and commercially viable zero-carbon ships remains out of reach. The signatories, including international shipowner associations such as Cruise Lines International and the World Shipping Council, said this is in part due to the lack of pricing signals.
It is widely accepted that new fuels and technologies will be more expensive than those in use today.
To reduce the price gap between fossil fuels and zero-carbon fuels, the statement also called for a US$5 billion (S$6.6 billion) fund to provide the research and development needed to make zero-carbon technologies more commercially viable.
"The industry is encouraging the world's largest economies to expand and accelerate applied research and development efforts," the submission said.
There are concerns that higher prices for carbon dioxide emissions will make shipping, which transports 80 to 85 per cent of the world's goods, too expensive. The industry players said that any such hikes should be "fair and equitable".
On Wednesday (April 21), an International Advisory Panel on Maritime Decarbonisation, set up by the Singapore Maritime Foundation last year, also submitted recommendations to the Singapore Government on how best to decarbonise the shipping industry here.
Among the proposals are also carbon pricing and greater support for research into cleaner marine fuels like ammonia and methanol.