World News
$2/MT Bunker Levy is Needed Before Carbon Tax: World Shipping Council
Shipping needs both industry groups' suggestion of a $2/mt bunker levy and a later and more expensive tax on carbon emissions to encourage its journey to decarbonisation, according to the World Shipping Council.
Industry bodies including the World Shipping Council have argued that both their proposal for a small bunker levy to build up a decarbonisation research and development fund and wider market-based-measures should be discussed at the same time at this year's MEPC meeting at the International Maritime Organization.
Ten IMO member states and eight industry associations currently back the International Maritime Research and Development Board (IMRB) proposal.
"The logic is clear: To solve a hard engineering problem on a global basis in a short period of time, you need a mechanism of the proper size and scope to solve that problem," John Butler, CEO of the World Shipping Council, said in an editorial for maritime news website Splash 247 this week.
"The IMRB is that mechanism, and the sooner it is up and operating, the sooner we can match the talk about decarbonisation with real-world technological solutions.
"Today we do not have fuels, containment systems, and fuel delivery infrastructure that can put a zero-carbon trans-oceanic ship on the water."
The IMRB proposal could help to deliver the necessary technology for marine decarbonisation, and carbon pricing could later be used to encourage the industry to use it, Butler argued. At current global bunker demand levels of 229 million mt/year, the bunker levy could build up $458 million per year of research funding.
"Carbon pricing works on the concept that if you make undesirable behaviour (burning fossil fuels) more expensive, then people will shift to more desirable behaviour (using low-carbon and no-carbon fuels)," Butler said.
"For the mechanism to work, however, there must be a viable pathway to the preferred behaviour.
"But that pathway does not exist today for deep-sea ocean shipping, and if carbon pricing is to deliver results, we must also create that technological pathway."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 570.00 | 1.00 | 683.00 | 2.50 |
| Rotterdam | 515.50 | 1.00 | 685.00 | 7.50 |
| Houston | 555.00 | 1.00 | 678.00 | 1.00 |
| Fujairah | 563.00 | 2.00 | 754.50 | 0.50 |
| Global 20 Ports Average | 587.50 | 1.50 | 765.00 | 0.50 |
| Global 4 Ports Average | 551.00 | 1.00 | 700.00 | 1.00 |
| Global Average Bunker Price | 634.50 | 1.00 | 812.50 | 1.00 |
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