File Photo: By VladSV / Shutterstock
SINGAPORE, Sept 25 (Reuters) – Commodities trader Trafigura on Friday proposed a carbon levy of $250-$300 per tonne of carbon-dioxide (CO2) equivalent on shipping fuels to make zero and low carbon fuels more economically viable and competitive.
The International Maritime Organisation (IMO) wants to halve the sector’s greenhouse gas output by 2050 against 2008 levels. If left unchecked, it says, global emissions from shipping could balloon by up to 130% by 2050, compared to 2008 levels.
“We believe that only through the introduction of a significant levy on carbon-intensive fuels can sufficient progress be made towards the decarbonisation of the global shipping industry,” Trafigura said in a research paper published on its website.
The revenue raised by the levy would be used to subsidise and incentivise low and zero carbon fuels, funding the research and development of alternative fuels and, in part, developing countries with the energy transition to mitigate the impact of climate change, Trafigura said.
Carbon emissions from shipping rose in the six-year period to 2018 and accounted for 2.89% of the world’s CO2, amid growing pressure on the industry to bring levels down.
“It is now time to put a price on carbon emissions in the shipping industry in the form of a global, mandatory industry levy,” the paper said.
Trafigura, which is responsible for more than 4,000 ship voyages per year, acknowledged that a carbon will have an immediate effect on shipping costs which companies would bear.
“This increase in operational costs will spur charterers to change behaviour to reduce emissions, charter more efficient ships and switch to lower carbon fuels,” Trafigura said. (Reporting by Roslan Khasawneh; editing by David Evans)
(c) Copyright Thomson Reuters 2020.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 108,747 members that receive our newsletter.
Have a news tip? Let us know.
Russia continues to use the Arctic as an expanding transport corridor for its hydrocarbon resources. Last year it carried 21.86 million tonnes of liquefied natural gas along the Northern Sea Route, the main shipping lane. This represents an increase of 8.6 percent or 1.73 million tonnes over the previous year.
The U.S. Coast Guard has taken action against Puerto Nuevo Terminals (PNT) in San Juan, Puerto Rico, suspending the facility’s permit to handle dangerous cargo after discovering unauthorized handling of...
An aging oil tanker sanctioned by the US is being taken apart in an Indian scrapyard, a potential watershed moment for the so-called dark fleet in a rapidly changing geopolitical landscape.
Maritime and offshore news trusted by our 108,747 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
