ICS: Bunker Suppliers Face Death of Fossil Fuels in Shipping
- Business & Finance
As the shipping sector sails towards a future of zero CO2 emissions, marine bunker suppliers could see a significant drop in demand for fossil fuels within as little as 25 years, International Chamber of Shipping (ICS) said.
“Governments need to recognise that many ships will remain dependent on fossil fuels probably at least until around 2050,” Simon Bennett, ICS Director of Policy, said at the Platts’ Mediterranean marine bunker fuel conference in Athens.
“But the momentum created by the Paris Agreement on climate change means that the wholesale switch to alternative fuels and propulsion systems will be relentless and inevitable.”
“This will happen as soon as the technology and bunkering infrastructure permits, which ICS is confident it eventually will, whether using fuel cells or batteries powered by renewable energy, technologies such as hydrogen or some other solution we can’t yet anticipate,” Bennett added.
Commenting on the development by IMO Member States of a comprehensive strategy for addressing CO2 emissions from shipping, scheduled to be adopted in April 2018, Bennett said there was already broad consensus among governments that the goal was zero CO2 emissions and that IMO had already drawn up a list of possible short, medium and longer term candidate CO2 reduction measures for helping shipping to achieve this.
ICS says that the most challenging area in the ongoing IMO negotiations is agreement on the levels of ambition for CO2 reduction, by the sector as a whole, before zero CO2 fuels become widely available.
This is the process of managing the transition to alternative fuels, which has to be set against projections for increased demand for maritime transport due to massive global population growth, plus increasing prosperity and economic development which international shipping directly facilitates.
The shipping industry, including ICS, has therefore proposed that IMO Member States should agree that the initial goal should be to hold the entire sector’s total CO2 emissions below 2008 levels.
On the controversial question of the possible development of a Market Based Measure to help reduce CO2 emissions from shipping, Bennett said that an MBM, most likely a fuel levy, was likely to go forward as a possible candidate measure as part of the initial UN IMO strategy to be agreed next April.
“Fuel is already by far shipping’s greatest cost, and we already expect a truly massive increase in bunker costs as a result of the switch to low sulphur fuels required by the IMO global sulphur cap that comes into effect in January 2020,” Bennett concluded.