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It was the image that grabbed the most shipping headlines during COP28, the United Nations’ annual climate conference, but just how revolutionary was the call from top shipping names for an end date for fossil-only powered newbuilds? Standing alongside each other, the CEOs of leading global shipping lines, MSC, Maersk, CMA CGM, Hapag-Lloyd and Wallenius Wilhelmsen (pictured), issued their joint declaration, urging the International Maritime Organization (IMO) to create the regulatory conditions to accelerate the transition to green fuels. The joint declaration calls for the establishment of four regulatory cornerstones starting with an end date for newbuilding of fossil fuel-only vessels and a clear greenhouse gas (GHG) intensity standard timeline to inspire investment confidence, both for new ships and the fuel supply infrastructure needed to accelerate the energy transition. Secondly, they have called for an effective GHG pricing mechanism to make green fuel competitive with black fuel during the transition phase when both are used. This can be done by distributing the premium for the green fuels across all the fossil fuel used. With low initial volumes of green fuels any inflationary effects are minimised. The mechanism must also feature an increasing regulatory incentive to achieve deeper emissions reductions. Furthermore, beyond covering the green balance fee, revenue generated by the mechanism should go to an research and development fund and to investments in developing countries to ensure a just transition that leaves no one behind. The technology just does not exist to replace fossil fuels The five men have also called for 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. Finally, they demanded a well-to-wake or lifecycle GHG regulatory basis to align investment decisions with climate interests and mitigate the risk of stranded assets. The four cornerstones policies have since been submitted to the IMO by the World Shipping Council, liner shipping’s lobby group. Dr Tristan Smith from UCL Energy Institute questioned whether the announcement was actually big news. “I thought it was rather underwhelming. It’s just a call for regulation that is mostly already in process and was agreed in principle at the IMO in July,” Smith said. Tim Hartnoll, executive chairman of X-Press Feeders, which this week unveiled its first methanol dual-fuelled boxship, described the call from his peers as “enormously ambitious”. “At this point in time the technology just does not exist to replace fossil fuels,” Hartnoll told Splash Extra. Gavin Allwright, secretary-general of the International Windship Association (IWSA), a lobby group for wind propulsion, welcomed the declaration as a positive move forward when taken along with the calls for carbon pricing and carbon intensity and a renewable energy regulatory framework. “My reading of the declaration is that this means that dual or even multi-fuel engines and storage tanks that can use alternative fuels such as ammonia, methanol, hydrogen will then be mandated. However, that doesn’t mean that those fuels in turn will be green versions of those fuels,” Allwright said. Khalid Hashim, managing director of Thai dry bulk owner Precious Shipping, wondered whether the WSC and the five CEOs had been reading his Q2 reports from earlier this year, subsequently carried in Splash, in which Hashim laid out plans for an immediate carbon tax and for IMO member states to put a hard stop to any fossil fuel-burning ships delivered by shipyards on or after January 1, 2030. A spokesperson for the IMO told Splash Extra that the updated GHG strategy agreed in July gives a clear timeline to adopting a technical element, namely a goal-based marine fuel standard regulating the phased reduction of the marine fuel's GHG intensity; and an economic element, on the basis of a maritime GHG emissions pricing mechanism. In terms of an end date for newbuilding of fossil fuel-only vessels, the spokesperson said IMO member states would need to propose and agree to this, suggesting the process could be comparable to the phasing out of single-hull tankers where specified dates were set.

Is an end date for fossil-only powered newbuilds viable?

Splash Extra analyses one of the big talking points from COP28 in Dubai.

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