All eyes on IMO: Maritime industry calls on global regulator to bridge existing fuel price gap

Maritime industry leaders, representing both the private and public sectors, have issued a joint call on the International Maritime Organization (IMO) Member States for a strong and global regulatory framework that accelerates the use of zero and near-zero greenhouse gas (GHG) fuels.

The private sector said it is ready to work with governments towards innovative policies and financial mechanisms that level the playing field between fossil and zero and near-zero GHG marine fuels.

The United Nations Global Compact’s High Level Ocean for the Future Meeting took place on September 23, 2024. The meeting gathered business leaders, governments, NGOs and multilateral organizations to take stock on key challenges and opportunities for ocean business.

Participants included shipping companies, ports, cargo owners, energy suppliers, banks, investors, insurers, class societies, crewing companies, seafarers associations and more.

“From the UN Headquarter in New York, we, business leaders, call on all International Maritime Organization (IMO) Member States to support a global regulatory framework that, in a just, inclusive, ambitious and timely manner, accelerates the use of zero and near-zero Green House Gas (GHG) fuels,” the parties said in a joint statement.

The maritime sector is uniquely and extensively regulated globally through the IMO. Today, the industry is at a tipping point with ambitious environmental goals and a keen focus on ensuring a just transition for all stakeholders while continuing to secure efficient global trade. To reach our targets, a strong and global regulatory framework with effective mid-term measures to bridge the price gap is urgently needed to ensure a level and competitive playing field.

We encourage all UN Member States to work together towards innovative policies and financial mechanisms to level the playing field between fossil and zero and near-zero GHG marine fuels. It is critical to speed up and scale up the production capacity of such marine fuels and the necessary infrastructure to support it in order to accelerate the green transition of the global supply chain.

Together, we can and must create a resilient and sustainable economy that thrives in harmony with the environment. The costs of doing too little too late will far outweigh the investments needed to transition to a sustainable economy. We are ready to do our part, in collaboration with governments, the UN and other key stakeholders.”

MSC amplifies UN Global Compact Call for IMO fit-for-purpose regulatory framework to accelerate use of net-zero fuels

Soren Toft, CEO of MSC Mediterranean Shipping Company, the world’s biggest containers shipping company, also joined maritime leaders at the UN’s High-Level Ocean for the Future meeting to call for a regulatory framework that accelerates the adoption of net-zero fuels in shipping.

“With net-zero fuels costing 2 to 5 times more than conventional options, we need IMO Member States to take bold action and close this price gap. The technology is ready, but scalable production and infrastructure remain a challenge,” he stressed.

This call to action from the world’s largest shipping companies comes right before the IMO’s Marine Environmental Protection Committee (MEPC) will convene at the end of September where they are set to further refine different proposals for a global fuel standard and carbon/GHG pricing – including how to charge for it, who would collect it and which fuels are considered low-carbon/GHG.

“MSC hopes that a clear consensus will emerge at IMO MEPC, one that balances ambition with pragmatism, and sends a strong signal that governments are up to matching the shipping industry’s commitment to change,” the company said in a statement.

Meeting delegates also voiced that regulations must be just, inclusive and ambitious. The human element is a crucial component to decarbonizing shipping by 2050 as it will be the seafarers who will need to safely operate engines running on net zero fuels. Therefore, crew upskilling will be critical to meet the target of net zero by 2050.

The High-Level Ocean of the Future meeting also showed the need to ensure a sustainable and resilient economy capable of adapting to global disruption. Trade opportunity and the liner shipping sector has for decades empowered communities to reach markets far beyond their coastlines.

Disruptive events over the past five years have brought to the fore the importance of commercial shipping for world commerce. A fit-for-purpose regulatory regime for the maritime sector, which combines the fundamental requirements for future fuels, as well as carbon pricing via an economic element, will be essential to close the gap between today and tomorrow, and ultimately catalyze the development and uptake of net-zero fuels, according to MSC.

MSC has fully supported and committed to net decarbonization by 2050. As such, MSC’s fleet renewal strategy includes over 100 dual fuel LNG containerships on order, and over 300 retrofits already being implemented across the existing fleet. The technology for today’s fleets to run on net-zero fuels already exists but scalable production and infrastructure are said to still inhibit accessibility to these fuels.