MEPC 84 is scheduled to take place end of next month. File Image / Pixabay

Brazil has called on the IMO to focus on emissions reductions rather than specific marine fuels when designing incentives for cleaner shipping.

The issue is no longer whether to price emissions, but “how to introduce additional rewards for ZNZs [zero or near-zero technologies and fuels] without undermining the cost-effectiveness of the overall policy package,” it said in a proposal to the IMO’s Marine Environment Protection Committee on March 4.

It sets out three approaches currently under discussion: incentives linked to fuel price gaps, rewards based on emissions reductions, and multiplier systems that increase the compliance value of cleaner fuels.

Brazil warns that price-linked mechanisms could create problems, noting that “bunker prices are highly volatile due to geopolitical shocks” and can be “a weak guide for long-term investment.”

Such systems could also lead to uneven carbon pricing and favour fuels that are already closer to commercial use.

It raises similar concerns about multiplier systems, which reward fuel use rather than emissions cuts and could distort competition between fuel options.

Instead, Brazil backs an approach where “abatement-based rewards tie subsidies directly to verified emissions avoided” and provide “a uniform marginal incentive per unit of emissions reduction.”

The proposal adds that “fuel-specific adoption is not the objective… Rather, the objective is to achieve a given emissions-reduction pathway at minimum social cost," it said in the submission to the IMO.

The submission comes ahead of the 84th session of the Marine Environment Protection Committee (MEPC 84), scheduled to take place from April 27 to May 1.