Skou backs $450 carbon tax per ton of fuel

The world’s largest container shipping company has proposed a carbon tax on ship fuel of at least $450 per ton of fuel as a way for the shipping industry to bridge the gap between fossil fuels and more expensive green fuels.

“Fossil fuels cannot keep being cheaper than green fuels. Action is required now. It is vital to consider all greenhouse gases, not just CO2, on a full life cycle analysis, otherwise we will not be able to truly decarbonize shipping by 2050 in line with the Paris Agreement,” Søren Skou, CEO of A.P. Moller Maersk, said.

Head of the container shipping major insists that governments and regulators play a key role in securing production and availability of zero carbon fuels for shipping.

“Maersk proposes a market based measure of at least $450 per ton of fuel in the medium term at current oil price. We all have a joint responsibility to do everything in our power to reduce carbon emissions. We owe that to customers, consumers and society in general,” he concluded.

The company has been a strong supporter of a market based measure to incentivize the sector’s decarbonization process.

 Simon Bergulf, Regulatory Affairs Director, A.P. Moller Maersk, said in a recent webinar, that the International Maritime Organization (IMO) needs to look at the global measures in the form of carbon pricing, because without it, it would be difficult to push alternative, zero-carbon fuels into the market.

Speaking last week at the Getting to Zero for Shipping session, hosted by the World Economic Forum, Skou pointed out that the IMO needs to deliver a market-based measure by 2025, so it can be implemented in the second half of this decade.

According to the Fourth IMO GHG Study, 13% of GHGs from international shipping could be reduced by 2030 thrugh the introduction of relatively low carbon prices of $100/tonne of CO2, combined with investment in wind propulsion solutions and adoption of slow steaming.

A higher carbon price of $416/tonne of carbon would be needed to reduce shipping emissions by 64% by 2050 and spur the adoption of zero-carbon fuels.

The calls for the introduction of carbon pricing are heating up ahead of the November meeting of the IMO working group which is expected to consider the establishment of $5 billion research and development fund aimed at accelerating the introduction of zero-emission technologies into the shipping industry.