5 Container Shipping Giants Call for End to Fossil Fuels

Five container shipping giants (A.P. Moller - Maersk, CMA CGM, Hapag Lloyd, MSC and Wallenius Wilhelmsen) have called for stricter regulation of greenhouse gas emissions from their industries and announced plans to end the construction of new fossil fuel-powered vessels. The CEOs of A.P. Moller - Maersk, CMA CGM, Hapag Lloyd, MSC and Wallenius Wilhelmsen made this announcement at the COP28 Climate Conference. They also called on the global regulator, the International Maritime Organization (IMO), to establish regulatory conditions to accelerate the transition to green fuels.

The companies characterized this as unprecedented action and expressed their shared belief that regulation could play a key role in reducing the cost of the green transition and mitigating the risk of extreme weather events. They said they expect other companies to join them, noting that the cost of climate change far exceeds the cost of the green transition.

In the carriers' statement, they made clear that the only realistic path for maritime shipping to meet the IMO's 2030, 2040, and Net Zero 2050 greenhouse gas targets is a transition from fossil fuels to green fuels for an industry that accounts for 2-3 percent of global greenhouse gas emissions.

The joint statement proposed the establishment of four regulatory measures:

• Establish a net GHG Intensity Standard timeline to set a cutoff date for new construction of fossil fuel-powered vessels and boost investment confidence.

• Create an effective GHG pricing mechanism that makes green fuel competitive with fossil fuels when both are in use.

• Ensure investments are directed to where the greatest GHG reductions are achieved.

• Align investment decisions with climate interests.

Source: Supply Chain Quarterly