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The shipping industry’s zero-tax status could be changing, with proposals from the group of Pacific nations that the industry pay a global levy for its carbon emissions to encourage it to transition away from hydrocarbons, Reuters reported on Monday. If applied by the International Maritime Organization (IMO), the levy would help raise an annual USD 100 bn that could go to poorer nations to help them cope with climate change and build up green shipping industries. The levy is one of the ideas on the agenda of French President Emmanuel Macron’s summit on a “new global financial pact” in Paris later in June. The IMO will then meet in early July, possibly setting a timeframe for introducing a levy if momentum is built.
How much is the levy? Led by the Marshall Islands, the group of Pacific nations are suggesting a levy that starts at USD 100 a tonne and then moves upwards from there to make fossil fuels as expensive as cleaner fuels.
Tanker orders are on the rise, but not at the rates needed to prevent future supply shortfalls, according to a recent Gibson Shipbrokersreport (pdf). Lingering effects from a pandemic-related drop in new tanker orders, diminishing near term yard availability, uncertainty about long-term demand for oil, as well as questions about vessel designs and fuels going forward have meant that tanker order books were at their lowest in at least 20 years at the start of the year, the report says. Despite a recent uptick in orders in 2023, the latest orders are below the amounts needed to make up for vessels facing retirement within the next few years, Gibson says.
At the same time, existing tankers are aging quickly, the report warns. Although some vessels are seeing their lifelines extended by new Russian trade, Russian demand for tankers is limited and will be exhausted, meaning that “focus will once again shift to demolition.” Environmental and regulatory pressures, in addition to risk aversion by major oil outfits, means that scrapping will soon catch up, leading to further shortfalls in tanker supply, Gibson explains.
