BIMCO CALLS FOR INDUSTRY TO GET BEHIND MARKET BASED MEASURES

“One way we can make the current low emission technologies competitive with traditional fuels is through some form of market-based measure. We need a mechanism that equalises the cost between using low carbon fuels and traditional fossil fuels,” says BIMCO president Şadan Kaptanoğlu.

The introduction of regional market-based measures, as was recently announced by the European Commission, raises the risk of ‘double-counting’ carbon emissions. BIMCO stresses that market-based measures for shipping should be governed by global rules, as it is critical the industry is not required to pay for its carbon emissions multiple times.

A market-based measure can be described as a rule or legal framework that encourages a desired behaviour through financial incentives. In this case, the shipping industry should be encouraged to use low carbon or zero carbon fuels to limit CO2 emissions.

But as long as using traditional fuels is dramatically cheaper, it will discourage the take-up of low carbon fuels and put first moving companies at a significant competitive disadvantage.

“Equalising the cost can also spur on innovation, because the potential market grows, and speed up the installation of the required infrastructure,” Kaptanoğlu says.

The IMO is a good platform for the debate on a set of rules, according to Kaptanoğlu, but it is critical that the debate begins now, in order for the industry to make the transition in time to reach our CO2 reduction targets.

The support for some form of globally regulated market-based measures was debated and agreed at BIMCO’s board of directors meeting in late January 2021.