Ahead of President Biden’s climate summit, shipping industry bodies representing the majority of maritime trade have called on world leaders to quickly commence deliberations on how mandatory market-based measures (MBMs) could be implemented for international shipping.

In a joint submission to the United Nations, BIMCO, Cruise Lines International, Association, the International Chamber of Shipping, and the World Shipping Council are asking member states at the International Maritime Organization (IMO) to bring forward discussions on the development of market-based mechanisms to help decarbonise global shipping.

With the summit hosted by the United States seen as a vital precursor to COP26 and the IMO’s Marine Environment Protection Committee (MEPC), shipping bodies want leaders to put their political weight behind the industry’s desire to eliminate the 2% of all global CO2 that the sector emits.

The group is also calling for the UN’s regulatory body to bring forward discussions around MBMs by several years.

MBMs put a price on CO2 emissions to provide an economic incentive for a sector to reduce its emissions by narrowing the price gap between fossil fuels and zero-carbon fuels. Shipping leaders believe that now is the time for the IMO member states to consider the role of MBMs so that measures can be developed and implemented to facilitate the adoption of zero-carbon technologies and commercially viable zero-carbon ships.

“For a pricing signal to work, there must be viable alternatives to fossil fuels,” said the group in a statement. “These alternatives do not yet exist for large trans-oceanic ships. Development of alternative technologies would be enabled by a massive acceleration of IMO co-ordinated R&D – to be financed by the industry – so that ocean-going ships will be able to switch to new fuels. To this end member states and industry have already put forward a mature proposal to create a 5 billion US dollar fund to provide the research and development needed to create the technologies to decarbonise the sector. Industry leaders have also reiterated their call for nations to support this R&D proposal at the IMO.”

“The ability to consider different candidate measures in parallel will be critical if [we are] to move forward with the urgency that the challenge of decarbonising shipping requires, given the urgent need to make progress on delivering [our] levels of ambition,” it added.

In alignment with shipping’s strategy to reach decarbonisation targets already set by governments, the industry is encouraging the world’s largest economies to expand and accelerate applied research and development efforts. As MBMs can take several years to develop and enter into force, implementation of MBMs and their incentivising impacts will only be able to coincide with the wider introduction of zero-carbon technologies if measures such as the industry-financed R&D fund proposal are approved.

The shipping groups are calling for any MBM to be applied in a fair and equitable way. They echo concerns that have been raised over unilateral carbon pricing schemes, such as the EU’s proposed expansion of its ETS, which is seen by some observers as a market distorting solution to a global problem.

“Fair and equitable MBMs are a viable policy option to transition to the new fuels and technologies that will be necessary to phase-out GHG emissions in the sector,” they added. “We’re joining with industry colleagues to urge the UN and national governments to prioritise discussion on MBMs to make sure that shipping remains on course to meet vital decarbonisation goals.”

“The decarbonisation of international shipping will depend on out-of-sector stakeholders developing market-available zero-carbon technologies and fuels and the maritime sector will need the technologies to use these. The urgency of the challenge requires leadership and a properly coordinated approach to catalyse and incentivise the transition to zero-emissions sector,” concluded the group.