WSC Details Critical Pathways for IMO to Set Decarbonization Framework

The debate on the path to decarbonization for the shipping industry is drawing fresh attention as the International Maritime Organization works to update its long-term strategy with upcoming meetings including the next session of the Marine Environment Protection Committee. Against that backdrop, saying that the industry needs guidance from regulators, and specifically the IMO, the container shipping industry through the World Shipping Council released what it calls six critical pathways to decarbonization.

“We are now offering our perspective on the critical pathways the IMO should consider as it tackles this global challenge,” said John Butler, President & CEO of WSC joined by the CEOs of Hapag-Lloyd, Ocean Network Express, and Crowley. “Action is needed now by the governments of the IMO so as not to stall development but rather to support ambitious innovators and front runners.” 

The CEOs of the three shipping companies joined the presentation to emphasize their view that the industry is united in its actions. While companies are individually investing in R&D into future fuels and technologies, they share the belief that a framework is critical from the regulators. Everyone agrees that the task ahead of the industry is massive saying that the focus must be to develop and implement innovative, concrete, and equitable global regulatory frameworks. The industry needs long-term clarity from the IMO, according to Rolf Habben Jansen, CEO of Hapag, saying that the IMO’s policies would help to determine what is economically viable for the shipping industry and fuel suppliers. He also predicted that with a framework in place it would accelerate the efforts underway across the industry.

The WSC believes that the six pathways spelled out in the plan show the IMO that it is possible but that the political discussion must give way to the nuts and bolts of achieving the decarbonization targets. The executives noted that many of the leading companies are currently ahead of the IMO with their individual targets to reduce and eliminate carbon emissions.

Discussing the messages that the container shipping industry was seeking to send to regulators, Jeremy Nixon, CEO of ONE, said, “The industry is saying we are not afraid of marketplace measures,” and indeed recognizes the needs, which is why they are seeking to engage the IMO in a dialogue. 

The six elements of the WSC plan include the marketplace measures laying out the elements of carbon pricing while saying that further dialogue is necessary to arrive at the correct number. It must be a price that levels the playing field with fossil fuels and supports not penalizes for the adoption of alternatives. They are calling for the IMO should discuss and research the right number. As part of the research, they are also calling for a transparent well-to-wake life cycle of fuels, while saying that it will also be critical to break out the portions from the well and the tank. To achieve the goals, they said it would be critical to segment each phase of the life cycle and possibly develop a phased-in runway developing incentives while recognizing that full renewable resources may not be universally available from the start.

They believe that maritime demand alone is not sufficient to drive the development of future fuels and as such, they are calling for integrated development through partnerships between IMO member states and energy providers. Where the fuel and infrastructure are available they also believe that the so-called “green corridors” can accelerate the transition as well as provide a best practices model which along with a public-private partnership to support the development of the infrastructure. The CEOs highlighted though that unlike the limited sources of fossil fuel, more emerging countries have the opportunity to participate through harnessing natural resources such as wind and solar energy.

The pathways proposal also recognizes that there are technological challenges including containment and safety for future fuels. Engine redesign they said would be relatively easy while calling for applied R&S and the development of shoreside systems to support alternative fuels. They also point to the current regulations that focus on improving the operation of fossil fuel ships suggesting that the IMO needs to add new standards specifically for new builds that encourage or accelerate the fuel transition. For example, they are suggesting requiring ships built after a certain date to be able to operate on zero GHG fuels or not allowing the construction of vessels that can only operate on fossil fuels after a certain date.

In submitting their critical pathways to the IMO, the WSC said it seeks to engage the IMO in a dialogue to address the issues. “We want to make sure the plan the IMO is developing is up to the job,” said Butler.

The WSC and the CEOs participating in the presentation said they recognize the political challenges but feel it is critical for the IMO as the only regulator for the global industry to come together to address the technical and practical challenges that lay ahead. They recognize that these are complicated matters and said they did not claim to have all the answers, but said the timing is urgent and everyone must work together to ensure the goals established in the Paris Agreement can be achieved.