ABS Raises Concerns Over IMO’s ‘Wild Card’ Carbon Levy Proposal
Uncertainty about the scale and nature of the IMO’s proposed carbon levy is holding back investment in shipping, according to the Christopher J. Wiernicki, Chairman and CEO of American Bureau of Shipping (ABS).
“A carbon levy is a wild card. It will all depend on how it is implemented and enforced. There’s a huge question mark over whether this will deliver for the industry and there is much still to be decided,” said Wiernicki.
Wiernicki expressed his concerns during an appearance at CERAWeek energy conference.
“Will the levy be set at $18, $100 or even $150 per ton? Today, we just don’t know but this clearly has a significant bearing on a host of factors: operational, investment and asset viability. With the lack of a clear global carbon pricing mechanism, it is no wonder owners are cautious and concerned given the high degree of uncertainty this introduces into the market,” added Wiernicki.
He said shipowners are responding with the available tools and that carbon capture was beginning to mature.
“The industry is balancing short-term efficiency measures with long-term fuel readiness. Investments in digital optimization, wind-assisted technologies, and energy efficiency will play a crucial role in bridging the gap until low-carbon fuels become viable at scale. Meanwhile carbon capture and storage (CCS) is starting to gain traction, with trials onboard suggesting that it could allow continued use of fossil fuels in a net zero scenario,” Wiernicki concluded
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