INTERNATIONAL shipping association BIMCO has called on states and the industry to start a dialogue on how to create a set of global rules for market-based measures to support the use of low-carbon fuels and to create a level playing field in the industry.

BIMCO president Şadan Kaptanoğlu said there needs to be a mechanism that equalises the cost between using low-carbon fuels and traditional fossil fuels.

“One way we can make the current low emission technologies competitive with traditional fuels is through some form of market-based measure,” she said.

BIMCO said market-based measures for shipping should be governed by global rules. It is critical that the industry is not required to pay for its carbon emissions multiple times. This is relevant if market-based measures are being implemented regionally as, for example, has been announced by the European Commission.

In July last year, European lawmakers agreed to include international carbon emissions from ships in the EU carbon market. At the same time, they called for binding targets for shipping companies do reduce their annual carbon emissions.

BIMCO said a market-based measure can be described as a rule or legal framework that encourages a desired behaviour through financial incentives. In this case, the shipping industry should be encouraged to use low carbon or zero carbon fuels to limit carbon dioxide emissions. But as long as using traditional fuels is dramatically cheaper, it will discourage the uptake of low carbon fuels and put the first moving companies at a significant competitive disadvantage.

“Equalising the cost can also spur on innovation, because the potential market grows, and speed up the installation of the required infrastructure,” Ms Kaptanoğlu said.

She said the International Maritime Organization is a good platform for the debate on a ruleset. However, it is critical that the debate begins now for the industry to make the transition in time to reach carbon dioxide reduction targets.

The support for some form of globally regulated market-based measures was debated and agreed at BIMCO’s board of directors meeting in late January 2021.