Maersk CEO Says Construction of Fossil Fueled Ships Should Be Banned

Maersk CEO Soren Skou says the International Maritime Organization should take a tip from the European auto industry by banning the construction of fossil fueled ships.

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His comments, which were posted to social media, have generated a lot of attention from the industry, which is still seeking to finalize its strategy to reduce and eventually eliminate greenhouse gas emissions from the world’s merchant fleet.

“The European Commission is proposing to end production of combustion engine cars in 2035. The International Maritime Organization should do the same for fossil fuelled ships with ambitious targets and measures to decarbonise shipping,” Skou wrote in a social media post that has been shared across platforms.

An accompanying video offered greater details of Skou’s vision for shipping’s decarbonization, which also includes a global carbon tax: “Combined, a global carbon tax and an end for fossil fuelled ships would be a strong signal to the shipping ecosystem – including yards and producers – about which way the wind is blowing.

We need to accelerate efforts to meeting global emission reduction targets,” Skou said. “A global ‘drop dead date’ would address future new built vessels, complementing the impact on existing ships from the carbon tax.

With a phase-in ending at 450 USD/t fuel, this tax would address the price gap between fossil fuels of today and the carbon neutral fuels of tomorrow.

“As the price gap narrows, the IMO’s Energy Efficiency Design Index in its coming phases could be the instrument to make the end date for fossil fuelled ships a global reality,” Skou adds. With ships transporting about 90% of world trade, ocean shipping accounts for nearly 3% of global CO2 emissions.

The International Maritime Organization (IMO) is currently in the process of finalizing its initial strategy for reducing Greenhouse Gas (GHG) emissions, which was first revealed in 2018 and sets an ambition of reducing annual GHG from international shipping by at least half by 2050, compared to 2008 levels, and work towards phasing out GHG emissions from shipping entirely as soon as possible by the end of the century.

Specifics of the strategy are still being worked out and the finalized plan isn’t expected until 2023.

A key element of the strategy involves the Energy Efficiency Design Index (EEDI), a measurement that seeks to improve the fuel efficiency of newbuild ships. EEDI was made mandatory in 2011 with the adoption of amendments to MARPOL Annex VI and has applied to new ship construction since 2013.

The first phase, beginning 2015, sought to reduce CO2 levels of new ships by 10%, with gradual tightening every five years. From 2025 onwards, a 30% reduction is mandated for applicable ship types based the average efficiency of ships built between 2000 and 2010.

Maersk is in the process of constructing its first carbon neutral ships, the first of which is due in 2023. Earlier this summer, Maersk signed a shipbuilding contract for the construction what is set to become the world’s first containership powered by carbon neutral methanol.

In August, the company announced a $1.4 billion investment on another eight 16,000 TEU containerships also capable of being operated on carbon neutral methanol. Skou’s comments are not the first time Maersk has called for a carbon tax. You can read more about that here.