International Chamber of Shipping Reports Progress on Carbon Pricing at IMO Working Group

The International Chamber of Shipping (ICS) has welcomed calls from the International Maritime Organization (IMO) for impact assessments to be submitted showing the likely effects of a carbon price on the industry.

Following the conclusion of the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 10) ahead of the UN climate change conference, COP 26, ICS hailed the meeting as “an important first step by governments to understand how carbon pricing might apply to shipping”.

According to ICS, the meeting saw government representatives begin a detailed consideration of existing industry proposals, and ask proponents of different market-based measures to submit assessments of their likely impact on the cost of maritime trade.

“We welcome the progress made by governments at the IMO, ahead of COP 26, to begin in earnest the process of setting a realistic carbon price for international shipping, and developing a market based measure to expedite the transition to net zero emissions,” said Simon Bennett, deputy secretary general of ICS, who was present at the meeting.

Bennett called the IMO meeting an “important first step” by governments to better understand how carbon pricing might apply to shipping within a global regulatory framework. There was general recognition that a piecemeal approach of regional or national measures won’t work, Bennet said. Rather, the ICS is optimistic that market-based measures (MBMs) can be taken forward by the IMO that address legitimate concerns among developing countries about the potential economic impacts.

“ICS is pleased that governments have now started their detailed consideration of current proposals, including the comprehensive proposal for a global carbon levy that ICS (and INTERCARGO) put forward to the IMO last month. This has much in common with a similar proposal from Pacific Island States.

“The next important step will be for proponents of different mechanisms to submit assessments of the likely impacts on the cost of maritime trade. ICS intends to get to work on this right away to demonstrate how a carbon levy can be equitably introduced for shipping. This will also help governments settle on a realistic initial quantum which will speed up the transition to zero-carbon shipping, while avoiding any disproportionately negative consequences,” Bennet said.