The expense of decarbonizing the shipping market will have a ripple effect on customers, according to a CEO in the maritime market.
“There will be an inflationary effect originating from [the] decarbonization of shipping … there is no concern of it,” Bertrand Chen, CEO of the Global Shipping Business Network, informed CNBC’s East Tech West conference in the Nansha district of Guangzhou, China.
New European guidelines that efficiently tax shipping lines for their emissions would rise expenses, Chen included.
“The EU government is imposing this cost to the shipping line … But now what that means is the shipping has to take action to decarbonize and naturally that will impact all the consumer. So, I think it’s just a trade-off people will have to live with.”
The European Union’s Emissions Trading System (ETS) is set to be reached the shipping market beginning in January 2024, suggesting that big ships going into EU ports will be charged for their co2 emissions.
The ETS presently covers sectors like mining and air travel and is developed to put an expense on carbon for the area’s most contaminating markets.
Chen explained the EU effort as “a natural action that will lead to some interesting effects.”
Alternative fuel
“Suddenly you require to be able to show that certainly you’re taking the best action [to decarbonize] and you can see in the shipping line market some individuals … are purchasing the methanol ships, who are establishing mutual fund to go purchase those resources, since it’s actually tough to purchase the alternative fuel. Some are more passive [and] are waiting to see,” he stated.
Shipping line Maersk introduced its very first vessel with an engine sustained by green methanol in September, however experts revealed issues about supply of the alternative fuel.
Shoppers might want to invest more on products that have actually been delivered or produced in a manner that “doesn’t create greenhouse gas,” however they will need evidence since of the high threat of greenwashing, Chen stated.
“Everyone will have to become decarbonized, it’s a question of time. And in that world, what you need is to be able to prove to the end consumer that indeed the action you’re taking is right and that’s something that’s not easy to prove today,” he included.
Using the blockchain to shop and admit to legal and monetary files might assist the shipping market offer that evidence, Chen stated.
Maritime countries concurred in July to lower emissions “by or around 2050,” throughout a conference of the United Nations’ International Maritime Organization.
— CNBC’s Silvia Amaro and Sam Meredith added to this report.
