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Five CEOs Call for Regulatory Partnership and End to Fossil Fuel Ships

Shipping industry CEOs at COP 28
Five the leading shipping industry CEO issued a joint statement on the path to decarbonization (CMA CGM)

Published Dec 1, 2023 6:49 PM by The Maritime Executive

 

The CEOs of five of the world’s largest shipping companies took the unusual step of joining together to outline a shared vision to accelerate the decarbonization of the global maritime industry. Timed to the conclusion of the first week of the UN’s COP 28 conference in Dubai, the executives of CMA CGM, Maersk, MSC, Hapag, and Wallenius Wilhelmsen called for cooperation including an alliance with the International Maritime Organization and the definitive regulatory measures needed to create the investment conditions critical to accelerating the industry’s green transition.

As four of the largest container shipping companies, along with the leader in vehicle logistics, each of the companies highlights that they have taken steps to drive the transition. They are investing in efforts within their fleets and reiterating their belief that the importance of shipping achieving the IMO’s greenhouse gas targets is very clear. 

“A crucial next step is to introduce regulatory conditions which ensure that we create the most greenhouse gas emission reductions per invested dollar,” said Vincent Clerc, CEO of A.P. Moller – Maersk. “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 decarbonization in shipping successful.” 

As frontrunners, the CEOs are convinced that even closer collaboration with IMO regulators will produce the effective and concrete policy measures needed to underpin the investment within maritime shipping and its ancillary industries that will enable decarbonization to occur at the pace required. Their joint declaration calls for the establishment of regulatory cornerstones to ensure the next steps for the industry and support the transition. 

Soren Toft, Chief Executive Officer of MSC Mediterranean Shipping highlights the belief that the shipping industry is at the forefront of technological innovation when it comes to decarbonization. He added, “The support of governments across the world will be an essential element to reach our common goal.”

The headline grabber from the executives is a call to set an end date for the new building of fossil fuel-only vessels and a clear GHG Intensity Standard timeline to inspire investment confidence for new construction and the required fuel infrastructure. They however are also calling for vessel pooling in regulatory compliance so that the performance of a group of vessels could count instead of only individual new builds.

“We believe that a regulatory framework and clear targets are crucial to accelerating the introduction of alternative fuels and reducing our carbon footprint,” said Rolf Habben Jansen, CEO of Hapag Lloyd.

Asserting that regulation can play a key role in mitigating the cost of the green transition, the CEOs are also endorsing a global maritime GHG pricing mechanism with “predictable pricing,” which they said could be used to build incentives for energy efficiency. To reduce the price gap between fossil fuel and sustainable marine fuels they are also calling for a pricing mechanism to level the field. They called for distributing the premium for green fuels across all the fossil fuels and suggested the “green balance fee” should go to an RD&D fund and investments in developing countries. 

Rodolphe Saade, Chairman and CEO of CMA CGM Group agreed that the program sets ambitious milestones saying that the industry should reach the upper targets of the IMO trajectory. Speaking for the coalition he also called for others to follow them and join in the efforts to accelerate decarbonization.