BIMCO Calls for Global Efforts to Support Low Carbon Fuels
The international association of shipowners and operators, BIMCO, is calling for governments and the shipping industry to work together to support the industry’s conversion to new environmentally-friendlier fuels. According to the board of the organization, there needs to be a global ruleset for market-based measures (MBM) to support the use of low carbon fuels and to create a level playing field for the industry.
“One way we can make the current low emission technologies competitive with traditional fuels is through some form of market-based measure,” said BIMCO president Sadan Kaptanoglu. “We need a mechanism that equalizes the cost between using low carbon fuels and traditional fossil fuels.”
BIMCO describes the market-based measure it is calling for as a rule or legal framework that encourages a desired behavior through financial incentives. In this case, they are proposing that these tools should be used to encourage the shipping industry to use low carbon or zero-carbon fuels to limit CO2 emissions.
“Equalizing the cost can also spur on innovation, because the potential market grows, and speed up the installation of the required infrastructure,” Kaptanoglu says. But as long as using traditional fuels is dramatically cheaper, it will discourage the uptake of low carbon fuels and put the first moving companies at a significant competitive disadvantage.
BIMCO stresses that market-based measures for shipping should be governed by global rules, as it is critical that the industry is not required to pay for its carbon emissions multiple times. This is relevant if market-based measures are being implemented regionally as, for example, has been announced by the European Commission.
The support for some form of globally regulated market-based measures was debated and agreed upon at BIMCO’s board of directors meeting in late January 2021.
The International Maritime Organization is a good platform for the debate on a ruleset, according to Kaptanoglu, 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.