Geopolitical Tensions Threaten IMO’s Carbon Levy Plans
As the International Maritime Organization (IMO) prepares for its Marine Environment Protection Committee meeting in April, uncertainties stemming from geopolitical tensions could jeopardize plans to establish a carbon levy. DNV’s Maritime CEO, Knut Ørbeck-Nilssen, expressed concerns that the chances of successful implementation have diminished, highlighting how trade issues and tariffs from the U.S. may shift focus away from decarbonization efforts.
Upcoming IMO Meeting and Decarbonization Challenges
The IMO’s upcoming meeting, scheduled for April 7-11 in London, is anticipated to outline significant mid-term measures aimed at achieving net-zero emissions in the maritime sector by 2050. Among the proposals on the table is a goal-based marine fuel standard that would mandate the use of lower-emission fuels, alongside a global pricing mechanism for maritime emissions. Ørbeck-Nilssen noted that while the fuel standard is likely to gain traction, the adoption of alternative marine fuels faces substantial hurdles.
Key challenges include the availability and cost of alternative fuels, as well as the necessary infrastructure to support their use. For instance, last year saw a marked preference for liquefied natural gas (LNG) over methanol, with orders for LNG-capable vessels more than doubling to 264, while methanol-capable orders only increased by 4% to 166. This trend is particularly evident in the container and pure car and truck carrier segments, where the availability of LNG in many ports has made it a more attractive option. In contrast, concerns over the accessibility and cost of green methanol have hindered its adoption.
Moreover, the feasibility of dual-fuel engines for tankers and bulk carriers is limited due to uncertainties surrounding alternative fuel supply and infrastructure at destination ports. Ørbeck-Nilssen emphasized that the unpredictability of shipping routes complicates fuel planning, particularly in light of recent geopolitical developments that have affected global shipping dynamics.
Technological Innovations and Green Investments
Technological advancements will play a crucial role in the maritime sector’s decarbonization efforts, extending beyond ship operations to include ports and refineries. Ørbeck-Nilssen pointed out that onboard carbon capture technology could significantly reduce emissions, especially for vessels that cannot transition to alternative fuels. Currently, 92% of the global fleet continues to operate on conventional fuels, underscoring the need for innovative solutions.
In addition to technological improvements, Ørbeck-Nilssen anticipates that investments in green vessels and energy-efficient technologies will be stimulated by the recently implemented FuelEU Maritime regulation. This regulation allows companies to pool emissions from multiple ships to comply with environmental standards. Larger shipping companies may be incentivized to invest in new green ships, as they can offset emissions from older vessels, creating a commercial incentive for greener investments.
FuelEU Maritime aims for a 2% reduction in greenhouse gas intensity by 2025, with a progressive target of an 80% reduction by 2050 for ships exceeding 5,000 gross tonnage calling at European ports. As the maritime industry navigates these challenges, the focus remains on balancing immediate operational needs with long-term sustainability goals.
