South Korean shipping companies, which have been at the forefront of international trade, are facing stricter carbon emissions regulations than expected.
The International Maritime Organization (IMO) will finalize medium- and long-term carbon emission reduction targets for international shipping at the 80th session of the Marine Environment Protection Committee (MEPC 80) in London on Friday. IMO is an agency of the United Nations responsible for regulating shipping.
According to sources from the shipping industry and relevant government agencies on Thursday, IMO plans to raise its previous target of reducing total greenhouse gas emissions to 100 percent by 2050 from 50 percent. Since 2008 marked the peak of greenhouse gas emissions in the shipping sector, a 100 percent reduction would effectively mean net-zero.
The shipping industry primarily relies on heavy fuel oil to fuel ships, which accounts for 3 percent of global carbon dioxide emissions. Once the 175-member IMO makes a binding decision, the pressure to adopt low-carbon fuels and convert ships to environmentally-friendly ones is expected to increase.
In particular, South Korea is home to HMM Co., the world’s eighth-largest shipping company by tonnage this year, and relies on maritime transportation for 99.8 percent of its imports and exports. Should it fail to respond to the carbon reduction trend and be subject to carbon levies or restrictions on vessel operations, it could have serious implications for the overall economy. It is urgent to take careful measures.
“The core of this discussion is for IMO to revise its initial strategy to accelerate the achievement of the net-zero goal in the shipping sector,” said Yang Chang-ho, vice chairman of the Korea Shipowners’ Association. Furthermore, along with the 2050 carbon reduction target, IMO will decide whether to introduce economic regulatory measures such as a carbon levy system that requires shipping companies to pay fees based on their carbon emissions. This could take the form of charging a certain amount per ton of carbon emitted by international shipping vessels, directly affecting the shipping companies’ transportation costs.
Source: Pulse
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