Punching above its weight, Pacific pushes for ship polluters to pay

Container ship carrying container for business freight shipping
PHOTO: UNCTAD

Punching above our weight has been the statement echoed in London this week to describe the tiny Pacific’s bold push against some of the global heavyweights to have polluters (ship) pay-up for their pollution. 

This proposal is in addition to Pacific’s drive at the International Maritime Organisation (IMO) ensuring its members decarbonise by 2050.

The powerful Marine Environment Protection Committee (MEPC) in its 79th session of IMO convened in London last week – where the Pacific’s proposal was amongst the key agendas discussed. IMO is revising its strategy to tackle the climate heating emissions of the shipping industry and the Pacific’s proposal is the popular concept that members are buying into.

The proposal spearheaded by the Marshall Islands and the Solomon Islands once adopted, mostly probably next year, will require ships to pay a contribution (levy) to an IMO fund for every tonne of fuel it takes on board that will run into trillions of dollars.

Super-powers like the United States and United Kingdom are strong supporters of the Pacific proposal.

The man behind the push and leader of the Six Pact countries leading the proposal, and Marshall Islands Ambassador to IMO, Albon Ishoda admitted that it has not been an easy ride adding that when the proposal was put forward nobody took it seriously but today things are changing.

“I am more optimistic by the way things are moving right now. I think the Pacific has done a lot of things, networking to bring other regions, countries to understand better where we are going and what our views are,” he said.

So what actually is the levy?

Isoda said simply it is for the polluters to pay for their pollution.

A statement from the delegation of Solomon Islands explains that in the future, when shipping will have completed the transition to zero Greenhouse Gas (GHG) emissions, fuel is expected to be more expensive than the present heavy fuel oil (HFO).

The purpose of the levy is to increase the cost of fossil fuel to higher than the price of zero emission fuel, which will then be competitive. A secondary goal is to ensure that fuel has a high minimum price so that investments in fuel saving measures will have easily determined profitability.

Initially, the levy will be 100 US$/tonne of CO2 equivalent, or for HFO about 300 US$/tonne of fuel. The amount will increase every five years, and will never decrease, so that the future minimum level is known. Shipping emits about 1.000 million tonnes of CO2 annually and the levy is expected to generate US$80 billion per year in revenue. Over 20 years this could be two trillion US$ aggregate. These numbers depend on the uptake of low/no GHG fuels. A rapid transition would reduce the level of the revenue.

Practical functioning

The proposal requires ships to pay a contribution of levy to an IMO fund for every tonne of fuel the ship takes on board. The amount is higher for those fuels that have a high Greenhouse gas (GHG) emission measured on the lifecycle, and lower for those with less. For completely zero climate impact fuels it is zero.

The Solomon Islands delegation explained the proposed levy is to be paid to a single account at the same time that the fuel is paid for. 

“The ship must carry this receipt as proof that is had paid the levy. Ships already carry ‘bunker delivery notes’ that describe exactly how much fuel the ship has taken on board. The two documents are sufficient to prove that the levy has been paid,” the delegate said.

Use of revenues

With a staggering amount of money that is likely to be generated by this proposal, there is high interest already in London on how the funds are to be used.

The Pacific groups has made its position known. They want the fund distributed to governments to support climate change mitigation and adaptation efforts in vulnerable countries, and a separate fund to subsidise research and develop new technologies and fuels.

This general distribution would be decided by an IMO body that would also decide in more detail how the revenue may be used, the Pacific Group behind the proposal stated. 

It is interesting to know how some countries felt that levy was only created for SIDs and LDCs.

“We didn’t realise these sentiments, but we want to address that because we want to make sure the levy benefits everyone. 

“Our position is always to help shape the future of shipping and in doing that we ensure we help everyone progress in this transition that is required of shipping to meet the 1.5 degrees’ threshold,” he said.

Isoda acknowledged that the success so far is not a one-man job but a team effort especially the six countries leading the proposal known as Six Pact, namely Marshall Islands, Solomon Islands, Tonga, Kiribati, Tuvalu and Vanuatu.

At the 79th Marine Environment Protection Committee (MEPC) in London the Pacific Islands countries were united behind their proposal adding their voices behind the leading players.

A leading United Kingdom academic, Dr Alison Shaw has been following the proposal since its early days these small nations are coming together create multilateral solution to the rising sea level rise.

She said: “The Small Islands Developing States of the Pacific region are extremely vulnerable to climate impacts and face an existential threat as a result of a climate crisis they did not cause. The region has seen islands disappear due to rising sea levels. The ambition and effectiveness of climate policy is a matter of survival for this region, and this stark reality underpins their calls for high ambition policy in the IMO. These small nations are coming together and leading efforts to create a multilateral solution, centered on limiting temperature rise to 1.5, or below, and to ensure an equitable and effective transition for the international shipping industry.”

Secretary General of the IMO Kitack Lim said with regard to greenhouse gas emissions, you considered the outcome of the thirteenth session of the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 13), and: “I note and welcome the progress made on these matters. It cannot be stressed enough how crucial it is that we keep the momentum and deliver an ambitious and fair, revised IMO GHG Strategy at MEPC 80 next year.”

The IMO Marine Environment Protection Committee meets in July next year for crucial decision on the issue, and the Pacific proposal is expected to be passed at that time which will change the organisation’s 80 years’ history.

Ambassador Ishoda said they would continue to push for a resolution calling for zero carbon by 2050.

He commended his Pacific Team saying: “It is flattering to hear the description on the hard work that everyone has put in. Pacific has always punched above its weight.”

Countries in favour of 0 by 2050 at MEPC 79: Nigeria (new), the Marshall Islands, Sweden, the Netherlands, Norway, Poland, Malta, Canada, Spain, Vanuatu, Tonga, the United States, the United Kingdom, the Solomon Islands, Denmark, Belgium, Germany, Italy, Finland, Tuvalu, New Zealand, Fiji, Ireland, Japan, Kiribati, Jamaica, Cook Islands, Mexico, Palau, Maldives, France, and Republic of Korea.

Countries in favour of net 0 by 2050 at MEPC 79: Chile (new), Vietnam (new), Singapore (new), and Australia. No to increasing the level of ambition at MEPC 79: South Africa, India, Brazil, Argentina, UAE, Indonesia, Saudi Arabia, China, Russian Federation, and Turkey.

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