U.S. wants to cut CO 2 emissions by $150 per ton

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U.S. wants to cut CO 2 emissions by $150 per ton

- John Kerry wants to accelerate the decarbonization of the global shipping industry that releases more carbon dioxide into the atmosphere each year than France and the U.K. combined

The United States climate envoy said in April that he wants international shipping emissions to drop by 2050, a much sharper cut than the current target. The United States is working in cooperation with others at the International Maritime Organization, which regulates global shipping, to adopt ambitious measures that place the entire sector on a path to achieve this goal, he said.

From Thursday, these targets face their first major test as countries gather for the latest round of IMO talks on cutting CO 2 emissions. The major proposals, including a carbon tax are on the table. And while little of significance is likely to be decided in this meeting, the fresh position is expected by industry insiders to give new impetus to the discussions.

'Game changer' is a strong word, but it's probably true in this context, According to A.P. Chief Executive Soren Skou. The U.S.-National Security Administration reported on the World's largest container line, Moeller-Maersk A S, the new container line. It suggests a 'better chance' of getting to zero emissions by 2050, he said.

Current 2050 target of shipping is only a 50% reduction in annual greenhouse gas emissions versus 2008, while limiting global warming to 1.5 degree Celsius requires net-zero CO 2 by around the same time. To date, there is no concrete plan to attain even this low level of ambition, although the industry supports putting a price on carbon in order to motivate behavioral change and enable fossil-based marine alternatives to compete with today's ocean fuels.

How does shipping reduce its carbon emissions?

To that end, Maersk has urged a CO 2 tax on marine fuels of at least $150 per ton, which would almost double the cost of very low sulfur fuel oil, a popular sail propellant, using the prices now in place. Commodities trading giant Trafigura has issued even higher price frames at $300-400 per ton.

On the agenda for the upcoming talks called MEPC 76, officially funded is a very small CO2 charge backed by the shipping industry and multiple countries to raise $5 billion for research into clean alternatives. There is also a call for a $100 carbon dioxide tax by 2025, all the while going up from the Solomon Islands and Marshall Islands. Not only will any discussions be approved this time round, but they are still worth watching.

'Look at it as a test point to see what kinds of measures stand a chance in current circumstances to be taken forward, said Faig Abbasov, Director of Shipping at Transport and Environment, a non-governmental organization. All the words that come out of the mouths of the country representatives will be valuable.

Although shipping is responsible for almost 3% of the planet's global CO 2 emissions, it is currently aiming to stop the release of greenhouse gases into the atmosphere by the end of the century. This doesn't sit well with the rising climate urgency in international community. According to the UN, more than 110 countries are now targeting carbon neutrality in under three decades.

Previously adopted rules on carbon intensity reduction relating to how ships are designed and operated, known as short-term measures, are also likely to be adopted at the talks formally. The wrangling over key details has recently taken place, with the U.S. among those pushing for a stronger reduction, Abbasov said.

The United States support passing regulations at the IMO to place the international shipping sector on a path to achieve zero greenhouse gas emissions, both in the context of the new measures to be adopted at MEPC 76 and the mid-term measures to be adopted in the coming years, '' said a State Department spokesman.

The success of its agenda in short-term measures is ultimately dependent on weaning the oil-based shipping industry - which delivers about 80% of world trade - off global fuels. For that to happen, governments around the world could have to implement a global carbon tax. That could be a tough conundrum for a U.S. administration that has yet to fully embrace that idea domestically.

Although the U.S. only has one vote at the IMO, its new stance ratchets up pressure in the organization, said Edmund Hughes, a former official at the UN regulator who was responsible for greenhouse gas emissions.

And that gives a very clear signal to corporate about investing, and that's critical, he said.

There are more stories like this on bloomberg.com.

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