IMO members prefer levy-based system for carbon pricing – UMAS

When an IMO working group on greenhouse gas reduction met last week its members were more inclined towards carbon levy-based market measures to rein in shipping emissions than an emissions trading system (ETS), says consultancy UMAS.

PHOTO: Bunkering of a bulk carrier. Getty Images

The International Maritime Organisation’s (IMO) Intersessional Working Group on Reduction of GHG Emissions from Ships met last week to discuss proposals on mid-term measures to rein in future shipping emissions.

A few delegates to the meeting considered the concept of a global ETS for shipping too complex, UMAS says. Some voiced preferrence for a carbon levy-based system, which has previously been proposed by the Marshall Islands and the Solomon Islands, or a version of the feebate championed by Japan leading up to the meeting last week.

While more members are getting onboard to to notion that some form of GHG pricing is needed as a mid-term measure to cut emissions towards 2030, there is still no agreement on exactly which market-based measure(s) to go for.

But UMAS’s principle consultant Dr. Aly Shaw says there was growing consensus around a need for a carbon-cutting measures that would combine a global fuel standard as a technical element, with market-based measures as an economic element.

Members supported a well-to-wake approach to reduce emissions rather than only looking at emissions further out in the supply chain and at the point of consumption. And most members welcomed calls for an equitable transition in which less developed countries will be helped to decarbonise their maritime sector, says Dr Shaw.

The biggest concerns raised during meetings last week were over availability of zero-emissions fuels - whether they will be available in time and at sufficient quantities to enable compliance.

The IMO's Marine Environment Protection Committee will convene in two weeks. Market-based measures are set to be a hot topic for discussion. The IMO plans to evaluate and select measures by spring next year.