<\/p>\n
The World Shipping Council, the industry body for ocean carriers, has joined the call for a "feebate" bunker tax-and-subsidy program – but with a new twist. <\/p>\n
The idea of the "feebate" is straightforward: fossil bunker consumers pay a levy, and the proceeds are used to subsidize the price of expensive green fuels. This makes green fuels more competitive on the market and paves the way for broader commercial adoption. <\/p>\n
The International Chamber of Shipping has proposed what may be the best-known feebate structure. ICS' levy would start at an initial $20-40, and would remain at that level until IMO member states vote to raise it, without an automatic mechanism to increase fees over time. <\/p>\n
WCS' bunker levy would start at a comparable level, but would increase automatically to match the expansion of the green-fueled fleet. <\/p>\n
For example, if the subsidy were paid out at a constant $267 for every tonne of CO2 saved, and 10 percent of the fleet ran on green fuel, fossil bunker buyers would pay a levy of $34 per tonne of CO2 emitted to cover the subsidy's costs worldwide.<\/p>\n
As green shipping grows to 20 percent of the fleet, the bunker levy would rise to $67. This would cover the extra cost of paying the same subsidy to more ships. The levy would be recalibrated in this manner every year, providing "pay-go" funding for the program. <\/p>\n
In the near term, a feebate structure would assist the green fuel initiatives of container ship owners, who have led the way in developing the first wave of decarbonized vessels. Alternative-fueled propulsion is less common in the bulker and tanker sectors, and the orderbook for these vessel classes shows less momentum towards greener options. <\/p>\n
“Collective action is vital for the liner shipping industry in striving toward decarbonization," said K.H. Wu, CEO of Taiwanese carrier Evergreen, which has 24 methanol dual-fuel container ships on order. "It is essential to have a new approach to greenhouse gas pricing that would drive demand for cleaner fuels from the start of the transition."<\/p>\n
IMO will be debating a range of "economic measures" for controlling greenhouse gas emissions at MEPC 81 in March, including the ICS and WCS proposals. <\/p>\n
maritime-executive<\/p>\n","protected":false},"excerpt":{"rendered":"
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