New agreement mandates vessels to lower emissions or face penalties

Amidst the chaos over global trade, countries around the world have reached a modest, yet surprising, modest agreement to reduce the climate pollution that arises from shipping goods from around the world.

It reached in London under the auspices of the United Nations Agency, the United Nations maritime organisation, so all ships passing goods across the ocean must either reduce greenhouse gas emissions or pay a fee.

The target is not what many people wanted. Still, it is the first time that global industries have faced the prices of climate pollution, no matter where they operate. Revenues are primarily used to help the industry clean up the fuel. Some of them can also go to developing countries, which are most vulnerable to climate risks. The agreement comes into effect in 2028 and approval by the country’s representative will be withheld at the next agency meeting in October.

Given the widespread support for Friday’s term, the organisation head has expressed his desire to be hired in October.

This contract was even more remarkable in international cooperation, as it reached even after the US. I was drawn from the lecture At the beginning of the week. No other countries followed.

“The United States is one country, and one country cannot derail the entire process,” said Faig Abbasov, Maritime Director of Transport and Environment, a European advocacy group that promoted the cleaning of the maritime industry. The contract is “the first binding decision that forces transport companies to be decarbonized and switched to alternative fuels.”

The contract applies to all ships, regardless of who’s flag, including ships registered in the United States. It remained unclear how Washington would respond to the fee agreement or how it would respond.

State Department officials only said the United States had not participated in the negotiations.

Ships run primarily on heavy fuel oil, sometimes called bunker fuel, and more than 80% of the world’s goods travel by ship. The industry accounts for around 3% of global greenhouse emissions, comparable to aviation emissions.

The agreement reached on Friday is far less ambitious than originally proposed by a group of island nations who proposed a universal assessment of emissions.

After two years of negotiation, the proposal sets up a complex two-tier fee system. Sets the carbon strength target. This is like a clean fuel standard for cars and trucks. Ships using traditional transport oil will have to pay a higher fee (producing $380 equivalent to metric tons of carbon dioxide), while vessels using less carbon-intensive fuel mix will have to pay a lower fee ($100 for all metric tons above the fuel standard threshold).

The organization estimates it will raise between $11 billion and $13 billion a year.

“That’s a positive outcome,” said Arsenio Dominguez, executive director of the organization. “This is a long journey. This doesn’t happen overnight. There’s a lot of concern, especially from developing countries.”

Thresholds become more severe over time. The industry can switch to biofuels to meet the standards. That is a controversial approach because biofuels are made from crops and growing more crops to make fuel can contribute to deforestation.

The new transport fuel standards aim to promote the development of alternative fuels that include hydrogen.

There have been objections from many quarters. Developing countries with maritime fleets said they would be unfairly punished because they have an old fleet. Countries like Saudi Arabia, which ships large quantities of oil, and China, which exports everything from plastic to electric cars around the world, have balked suggestions to set higher prices, according to people familiar with negotiations.

“They have given up on the proposal of a reliable source of income for us who are desperately needing finances to help with the impact on the climate,” said Ralf Lebenbanu, Minister of Climate in Vanuatu in a statement after the vote.

Eventually, countries that voted in favor of the compromise agreement included China and the European Union. Saudi Arabia and Russia voted against it.

The United States has withdrawn from consultations entirely.

The global shipping industry agreed in 2023 to eliminate greenhouse gas emissions by around 2050. Last year, we tracked that commitment with a more concrete plan and took the first step towards establishing carbon prices across the industry.

The forecasts from the International Shipping Office, an industry group, found that prices have negligible effects. “We recognize that this may not be the agreement every section of the industry wanted, and we are concerned that this may not be far enough ahead of itself in providing the certainty that is needed.” “But that’s a framework we can build.”

Claire Brown Reports of contributions.