As global temperatures continue to breach critical levels and create more frequent and devasting weather extremes, five maritime shipping CEOs today called for tighter greenhouse gas (GHG) emissions regulation over their industry, and revealed plans to set an end date for fossil-only powered newbuilds.
The announcement was made at the COP28 climate conference by the chief executives of A.P. Moller – Maersk, CMA CGM, Hapag Lloyd, MSC, and Wallenius Wilhelmsen. The leaders also urged the International Maritime Organization (IMO), their global regulator, to create the regulatory conditions to accelerate the transition to green fuels.
Calling it an “unprecedent action,” the companies said they “express their shared conviction that regulation can play a key role in mitigating the cost of the green transition as well as the risk of extreme weather events. Given the cost of climate change is far greater than the cost of the green transition they look forward to being joined by other companies.”
In their statement, the container carriers said the importance of shipping achieving IMO’s 2030, 2040, and net-zero 2050 greenhouse gas (GHG) targets is very clear. And they concluded that the only realistic way to meet those targets for an industry that accounts for 2-3% of global GHG emissions is to transition from fossil to green fuels at scale and at pace.
The joint declaration called for the establishment of four regulatory “cornerstones”:
- an end date for new building of fossil fuel-only vessels and a clear GHG Intensity Standard timeline to inspire investment confidence, both for new ships and the fuel supply infrastructure needed to accelerate the energy transition.
- an effective GHG pricing mechanism to make green fuel competitive with black fuel during the transition phase when both are used.
- a vessel pooling option for GHG regulatory compliance where the performance of a group of vessels could count instead of only that of individual ships, ensuring investments are made where they achieve the greatest GHG reduction
- a "Well-to-Wake" or lifecycle GHG regulatory basis to align investment decisions with climate interests and mitigate the risk of stranded assets.
“Climate change is a general concern not a matter of competition,” Rodolphe Saadé, chairman and CEO of the CMA CGM Group, said in a release. “The CMA CGM Group is extremely pleased to join this unique coalition, which brings together leading shipping companies to urge to the adoption of the upper targets of the IMO trajectory. This sets an ambitious milestone for the decarbonization 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.”
Likewise, A.P. Moller – Maersk CEO Vincent Clerc emphasized the importance of consistent regulation for the industry. “A.P. Moller - 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,” Clerc said. “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.”
