Nations preserve a plan to adopt a global fee on shipping emissions, but keep their options open

The world’s maritime nations preserved a plan to adopt the first global carbon fee on shipping, as they agreed to keep working on it in the fall and adjourned their meeting Friday.

However, they also agreed to continue discussing alternative proposals and entertain new ones, which could change the plan substantially.

Nations met this week at the International Maritime Organization headquarters in London in preparation for potentially voting in the late fall on new, global regulations to clean up shipping, or the “Net-zero Framework." Instead of finishing the discussions, the delegates scheduled more meetings for the fall to keep working ahead of a vote, keeping the framework as a foundation for their negotiations.

A number of countries submitted alternative proposals and suggested changes, and said those should still be on the table, for inclusive, constructive negotiations. The meeting chairman, Harry Conway of Liberia, assured the group on Friday that these options could still be considered at the forthcoming meetings, and new documents could still be submitted. The document that outlines the work for these meetings was modified to make that explicit.

Australia and others expressed concerns that continuing to discuss alternatives would set the process back, when the impacts of climate change are being felt worldwide and the shipping industry is calling for certainty now to make investments in green technologies.

As the meeting closed, IMO Secretary-General Arsenio Dominguez said “we kind of are back on track,” while urging delegates to rebuild trust and continue talking to each another.

Em Fenton, of Opportunity Green, said the framework survived, with a majority of countries supporting it, but “survival is not a victory and we cannot end up in a cycle of open-ended negotiations.”

“We must now look forward to moving toward adoption of the framework later this year in a way that maintains urgency and ambition, and delivers justice and equity for countries on the front lines of climate impacts,” said Fenton, senior director for climate diplomacy at the U.K.-based climate change nonprofit.

The regulations would establish a pricing system which would impose fees for every ton of greenhouse gases emitted by ships above allowable limits, in what is effectively the first global tax on greenhouse gas emissions. The United States and Saudi Arabia are among those that strongly oppose a fee.

Nations agreed on the Net-zero Framework last year. Delegates met in October to adopt it, a step that was widely expected to be a formality. The U.S., with trade threats from U.S. President Donald Trump, and support from Saudi Arabia and others, derailed the meeting. Delegates decided to postpone the decision by a year and adjourn.

Most ships today run on heavy fuel oil that releases carbon dioxide and other pollutants as it’s burned. Shipping emissions have grown over the past decade to about 3% of the global total as trade has grown and vessels use immense amounts of fossil fuels to transport cargo over long distances. There is a lot of interest in ammonia as an alternative fuel because the molecule doesn’t contain carbon.

The framework would set a marine fuel standard that decreases, over time, the amount of greenhouse gas emissions allowed from using shipping fuels. The regulations also would establish the pricing mechanism. The fees collected would go into an IMO fund to invest in fuels and technologies needed to transition to green shipping, reward low-emission ships and support developing countries so they aren’t left behind with dirty fuels and old ships.

This will put the global shipping industry on more sustainable footing, both environmentally and economically, than where it is today, said Mark Brownstein, who leads the Environmental Defense Fund’s global energy transition strategy. Oil prices keep going higher since the war with Iran began.

The IMO, which regulates international shipping, set a target for the sector to reach net-zero greenhouse gas emissions by about 2050, and has committed to ensuring that fuels with zero or near-zero emissions are used more widely.

Large ships last about 25 years, so the industry would need to make changes and investments now to reach the goal around 2050. The International Chamber of Shipping, which represents over 80% of the world’s merchant fleet, has advocated for adoption of the regulations.

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