Industry leaders offer a united view at COP28 on the concrete regulatory measures needed to create the investment conditions critical to accelerating the industry’s green transition

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The chief executive officers of leading global shipping lines issued a joint declaration at COP 28 calling for an end date for fossil-only powered newbuilds.

In a joint declaration, the CEOs urged global regulator the International Maritime Organization (IMO) to create the regulatory conditions to accelerate the transition to green fuels.

”Global temperatures are breaching critical levels, creating more frequent and devastating results,” the Wallenius Wilhelmsen group stated. ”Therefore the importance of shipping achieving IMO’s 2030, 2040, and net-zero 2050 greenhouse gas (GHG) targets is very clear.

”The only realistic way to meet those targets for an industry that accounts for 2-3 per cent of global GHG emissions is to transition from fossil to green fuels at scale and at pace.

”Being at the forefront of introducing lower GHG emission ships underscores the CEOs’ commitment to the IMO GHG reduction objectives for 2030, 2040, and 2050,” the statement continued.

”As frontrunners, the CEOs are convinced that even closer collaboration with IMO regulators will produce the effective and concrete policy measures needed to underpin the investment within maritime shipping and its ancillary industries that will enable decarbonisation to occur at the pace required.”

The joint declaration called for the establishment of four regulatory ‘cornerstones’:

- An end date for new building of fossil fuel-only vessels and a clear GHG Intensity Standard timeline to inspire investment confidence, both for new ships and the fuel supply infrastructure needed to accelerate the energy transition.

- An effective GHG pricing mechanism to make green fuel competitive with black fuel during the transition phase when both are used.

- A vessel pooling option for GHG regulatory compliance where the performance of a group of vessels could count instead of only that of individual ships, ensuring investments are made where they achieve the greatest GHG reduction and thereby accelerating decarbonisation across the global fleet.

- A well-to-wake or lifecycle GHG regulatory basis to align investment decisions with climate interests and mitigate the risk of stranded assets.

In what the Wallenius Wilhelmsen group called an “unprecedent action”, major players of the shipping industry expressed their shared conviction that regulation could play a key role in mitigating the cost of the green transition as well as the risk of extreme weather events

“AP Moller-Maersk wants to accelerate the green transition in shipping and logistics and a crucial next step is to introduce regulatory conditions which ensure that we create the most greenhouse gas emission reductions per invested dollar,” said Vincent Clerc, Maersk CEO.

”This includes an efficient pricing mechanism to close the gap between fossil and green fuels and ensuring that the green choice is easier to make for our customers and consumers globally.

”The momentum for green fuel is building and we are pleased to see strong partnerships across the industry as we continue our joint efforts of making decarbonisation in shipping successful,” Clerc noted,

Rodolphe Saadé, chairman and CEO of the CMA CGM Group, said that climate change was a general concern and not a matter of competition.

”The CMA CGM Group is extremely pleased to join this unique coalition, which brings together leading shipping companies to urge to the adoption of the upper targets of the IMO trajectory.

”This sets an ambitious milestone for the decarbonisation of our industry,” he outlined. ’By collaborating with others, we each take a new step in our energy transition, while ensuring a collective level playing field and access to greener fuels for the industry.”

The collective responsibility for a sustainable future and clean practices was paramount, according to Rolf Habben Jansen, chief executive officer of Hapag Lloyd.

”At Hapag-Lloyd, we reaffirm our commitment to advance the decarbonisation of the maritime industry and strive to be at the forefront of the energy transition,” he said. ”We believe that a regulatory framework and clear targets are crucial to accelerating the introduction of alternative fuels and reducing our carbon footprint.

”This commitment is in line with Hapag-Lloyd’s goal of achieving a net-zero carbon fleet by 2045 and reflects our industry’s unwavering commitment to environmental responsibility.”

Soren Toft, CEO of MSC Mediterranean Shipping Company, said shipping was at the forefront of technological innovation when it came to decarbonisation and pointed out that MSC’s fleet renewal strategy included 100 dual fuel vessels.

”We are proud to be part of this unprecedented collaboration with our peers and it is only right that together we follow this path towards net zero that we must achieve by 2050,” Toft said.

”The support of Governments across the world will be an essential element to reach our common goal and among those efforts we want to see an end to delivery of ships that can only run on fossil fuels.

”MSC has fully supported and committed to net decarbonisation by 2050 but without the full support from other stakeholders particularly energy providers it will be extremely difficult to meet those objectives - no one can do this alone,” he said.

”Today it feels like we are one step closer in this regard, but concrete supply of alternative fuels and globally recognised GHG pricing are essential to achieve our goals.”