Maersk calls on carbon tax for fossil fuel bunkers to bridge transition gap

The world's largest container company, Maersk, is calling for a carbon tax on fossil fuel-based marine fuels to push cost incentives for change as the shipping industry moves towards greener targets.

"We propose a carbon tax on ship fuel of at least $450 per ton fuel ($150 per ton CO2), a levy to bridge the gap between the fossil fuels consumed by vessels today and greener alternatives that are currently more expensive," Soren Skou, Maersk's CEO said in a LinkedIn post on June 2.

"Member states at International Maritime Organization play a key role in securing production and availability of zero carbon fuels," he added.

The announcement comes as IMO's Marine Environment Protection Committee is expected to meet for its 76th session between June 10 and 17.

"It is important that we start to concentrate around what is needed and by when," Director of Regulatory Affairs at Maersk, Simon Bergulf, said in a LinkedIn post.

"A [carbon levy] phased in over a short period well within this decade will provide the right inventive to push renewable shipping fuels into the market."

At present, oil-based shipping fuels remain the most prevalently used shipping fuel amongst the global fleet. Oil-based fuels held 92% of demand at Europe's largest refueling hub in Rotterdam during the first quarter of 2021, but LNG and biofuels were on the rise with 6% and 2%, respectively.

A combination of cost and the infancy of some greener alternatives is hampering a considerable demand shift. Given the current conditions, oil-based fuels could remain the dominant choice for many years to come, according to S&P Global Platts Analytics.

But Maersk is aiming to operate the world's first carbon-neutral vessel by 2023, seven years ahead of its own schedule, and 27 years ahead of IMO's toughest emissions targets in 2050.

The feeder vessel, which will be powered by carbon-neutral methanol, will be launched in 2023 and will have a capacity of 2,000 twenty-foot equivalent units, or TEU.

While there are positives for methanol's use as a marine fuel, obstacles such as price and supply availability remain key to limiting uptake, traders have said.