A GLOBAL carbon price seems like a distant prospect right now.
This, shipping industry bosses fear, opens the door to each country implementing its own shipping emissions tax, like the EU has. And of those countries, the most important is China.
But would China actually do it? It has the power, and shipping companies couldn’t dodge it as easily as they could smaller countries.
But China’s exporters are already under significant pressure from US tariffs. Slapping another cost on their trade would be a tough call for policymakers.
Taxing your foreign customers’ trade without sharing the proceeds with them is a tough sell.
Setting up a workable emissions trading system or carbon levy for shipping is not an easy job either, as Brussels has discovered in recent years. A global system really would be best for everyone, hard as that is.
China is the world’s clean-energy superpower. It hopes to shed dependence on imported fossil fuels, and to corner a market for green ship fuel as soon as the IMO creates one.
But building massive amounts of as-yet speculative production capacity for an uncertain market is still a big gamble. If China is anything in foreign policy, it’s pragmatic.
When there is a clear business case for green tech (such as batteries) China goes all-in, and so leads the world.
All this doesn’t make a Chinese carbon price on shipping impossible. But it may give risk and compliance managers some respite for now…
Declan Bush
Senior reporter, Lloyd’s List
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