This article was originally published by Grist and is reproduced here as part of Climate office.
Thousands of freighters cross the oceans every day, carrying everything from cars and clothing to plastic pellets and garden gnomes, while their giant engines pump greenhouse gases through the air. The shipping industry plays a prominent role in global trade, and as its emissions continue to rise, regulators are beginning to consider an ambitious but controversial idea: to charge shipping companies for their pollution.
The International Maritime Organization agreed at its June meeting to discuss proposals to put a price on ship emissions at the next IMO meeting in October. In the bureaucratic and slow field of shipping, even this subtle gesture was seen as a big step. The last time the UN agency formally debated “market-based measures” was eight years ago, and the effort was ultimately abandoned amid widespread disagreement.
Since then, annual industry emissions have increased by almost 10%, according to the latest IMO research, contributing to nearly 3% of the global total. If ships continue to burn oil instead of switching to carbon-free alternatives, those numbers are expected to skyrocket in the years to come as more ships take more routes, undermining the broader global struggle to control greenhouse-effect gas.
Experts say existing policies to reduce fuel consumption and improve energy efficiency have not done enough to steer the industry on a cleaner path. Much stronger measures are needed not only to reduce emissions from existing ships, but also to ensure that new ships are designed to operate in a carbon-free world. “It is becoming increasingly urgent” for the IMO to act, said Aoife O’Leary, London-based director of international climate for the Environmental Defense Fund. In previous IMO meetings, activist groups like Ocean Rebellion have found their own way to pressure regulators: by spilling fake oil outside the London headquarters.
The main proposal on the IMO’s agenda in October comes from the Marshall Islands and the Solomon Islands, two countries particularly vulnerable to sea level rise and severe drought caused by climate change.
Pacific island nations have proposed requiring shipping companies to pay $ 100 for every metric ton of carbon dioxide equivalent they emit, starting in 2025. The price would then increase every five years, reducing increasingly expensive to use dirty diesel fuels and cheaper to use. cleaner options, such as ammonia, hydrogen fuel cells, next-generation sails, and shore-based charging infrastructure where ships can plug in.
The concept already exists for other companies. Around the world, nearly 60 national and local carbon pricing systems encompass power plants, oil refineries and steel mills. In Norway, ships pay a tax on emissions of nitrogen oxides, a harmful air pollutant. The funds are used to invest in pollution reduction measures such as the construction of battery-powered ferries.
The proposal would use the money raised to help countries most vulnerable to climate change adapt and decarbonise. It would also help shipping lines move away from dirty fossil fuels and develop and deploy emerging (and expensive) alternatives.
“This gives renewable technologies the opportunity to compete with the well-established and highly polluting fossil fuels that threaten our islands,” Albon Ishoda, the Marshall Islands’ ambassador to the IMO, recently wrote.
The Marshall Islands has been at the forefront of climate action within the IMO. The country is home to the third largest ship registry in the world and relies on freighters to import food, medicine and other essentials. Yet Ishoda and others have warned that the uncontrolled emissions pose an “existential threat” to the low-lying archipelago of 79,000 people. In 2018, the Marshall Islands played a key role in setting the IMO’s first greenhouse gas reduction targets. Now he is pushing to make sure the ships actually meet those targets.
The IMO climate strategy calls for reducing the carbon intensity of international maritime transport by at least 40% by 2030, compared to 2008 levels. (Carbon intensity is a measure of CO2 emissions from a ship, linked to the amount of cargo carried during a voyage.) The UN agency also wants to halve the industry’s total annual emissions by 2050.
At a meeting in June held via video conference, IMO members adopted short-term measures that require existing ships to meet energy efficiency standards, as well as improve their carbon intensity by 2% each. year between 2023 and 2026. Environmental groups and other critics have said the policies are well below what is needed to meet the organization’s own ambitions, let alone limit warming to 1.5 degrees Celsius compared to pre-industrial times.
“What has been done so far resembles the status quo,” said Michael Prehn, who represents Solomon Islands in the IMO negotiations. “So someone has to come up with a proposal that will actually do something.”
Industry analysts and even some leading companies have supported pricing carbon emissions to accelerate investments, both in alternative fuels and in the infrastructure required to produce, store and distribute those fuels.
Trafigura, a global commodities trader, is pushing for a tax of between $ 250 and $ 300 for every metric ton of carbon emitted, the amount, researchers say, needed to review how ships operate. Maersk, the world’s largest container shipping company, has asked for a carbon tax of $ 150. “Fossil fuels cannot continue to be cheaper than green fuels,” said Søren Skou, CEO of Maersk, in a LinkedIn post last month. An industry-led initiative is targeting a tax of $ 2 on every metric tonne of marine fuel.
Such initiatives face strong opposition from other shipping companies and export-dependent countries. Argentina, Brazil and Saudi Arabia have warned that tougher climate policies will hurt their economies by making it more expensive to ship food, metals, oil and other goods on ships. The Cook Islands, which depend on cargo ships for essential imports and inter-island transport, fear this could increase the cost of living.
Advocates say funds raised through a tax could help soften any blow to hard-hit countries. Both Prehn and O’Leary noted that the proposed royalty of $ 100 per tonne falls well within normal price variations for shipping fuels, which can range from $ 200 to $ 600 per metric tonne. Industry, in other words, is used to absorbing additional costs when oil prices rise.
Figuring out how the carbon price will work and how the funds should be distributed “is going to be a struggle,” Prehn said. The promoters hope to reach an agreement by 2023, a tight deadline according to IMO standards.
The debate over the price of brewing carbon comes as the regulator faces increasing public scrutiny.
In early June, a few days before the IMO negotiators meeting, the New York Times released an investigation which found that the UN agency had “repeatedly delayed and watered down climate regulations” at the behest of companies and industry groups. And a new documentary by European journalists, titled “Black Trail”, accuses the shipping industry of “polluting with impunity”.
European Union officials, frustrated by the IMO’s slowness, are preparing to include freighters in the European emissions trading system from next year. The cap-and-trade system already limits emissions from power plants, manufacturing facilities and airlines. Maritime transport accounts for a significant share (around 13 percent) of total EU emissions from transport. Meanwhile, in the United States, the Biden administration has said it will push the IMO to step up its targets, from halving emissions by 2050 to eliminating them altogether.
“If IMO is to remain relevant, it is going to have to step up,” O’Leary said.