Major Shipping Lines Call for an End Date for Fossil-Fuel Only Newbuilds
The CEOs of leading shipping lines MSC, Maersk, Hapag-Lloyd, CGM, and Wallenius Wilhelmsen have issued a joint declaration calling for an ‘end date’ for fossil-fuel only powered newbuilds.
The joint declaration was made at COP 28, with the group of CEOs urging the International Maritime Organisation (IMO) to set in place the regulatory conditions to accelerate the transition to green fuels.
These proposed regulatory conditions centre on four ‘cornerstones’:
- An end date for the new building of fossil-fuel only vessels. Related to this, the joint statement calls for the introduction of a clear GHG Intensity Standard timeline to inspire investment confidence.
- An effective GHG pricing mechanism. This mechanism should make green fuel competitive with black fuel during the transition phase when both are in use by the industry. The statement also calls for an increasing regulatory incentive to achieve deeper emissions reductions.
- A vessel pooling option. This would involve the GHG performance of a group of vessels being counted together rather than as individual ships. This would ensure that investments are made where they achieve the greatest overall GHG reduction and thereby accelerate decarbonisation across the global fleet.
- A well-to-wake or lifecycle GHG regulatory basis. This will aim to reduce the risk of stranded assets.
The joint statement from maritime industry leaders comes at a time when global temperatures are breaching critical levels. Therefore, it’s becoming increasingly pressing for the shipping industry to meet the IMO’s 2030, 2040 and net-zero 2050 greenhouse gas reduction objectives.
Vincent Clerc, Maersk’s CEO’s contribution to the joint statement read as follows:
“Maersk wants to accelerate the green transition in shipping and logistics and a crucial next step is to introduce regulatory conditions which ensure that we create the most greenhouse gas emission reductions per invested dollar.
This includes an efficient pricing mechanism to close the gap between fossil and green fuels and ensuring that the green choice is easier to make for our customers and consumers globally. The momentum for green fuel is building and we are pleased to see strong partnerships across the industry as we continue our joint efforts of making decarbonisation in shipping successful”.
Rodolphe Saade, CEO of the CMA CGM Group, said:
“Climate change is a general concern not a matter of competition. The CMA CGM Group is extremely pleased to join this unique Coalition, which brings together leading shipping companies to urge the adoption of the upper targets of the IMO trajectory.
This sets an ambitious milestone for the decarbonisation of our industry. By collaborating with others, we each take a new step in our energy transition, while ensuring a collective level playing field and access to greener fuels for the industry.
This new commitment is fully in line with the CMA CGM Group’s ambition to be Net Zero by 2050.
We have already invested close to $15 billion in decarbonising our fleet, which will enable us to have almost 120 vessels capable of being powered by decarbonised fuels by 2028. Pioneering LNG as a transition energy, our Group has also launched several large industrial partnerships to diversify our sourcing with even more decarbonised fuels.
In 2023, the CMA CGM Group will reduce its CO2 emissions by around ~1 million tons. Alongside the members of this coalition and all those who will join us afterwards, the CMA CGM Group pursues its decarbonisation journey and renews its commitment to a shared and sustainable future”.
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