News / Close price gap between fossil fuel and going green, urges Maersk CCO

Image made by The Loadstar using Dall-E

Shippers shouldn’t have to choose between “what is cheap, and what is the right thing to do”, according to Maersk’s CCO Karsten Kildahl, as he urged authorities to close the fuel-pricing gap.  

On the sidelines of Maersk’s vessel-naming ceremony at the UK port of Felixstowe this week, Mr Kildahl explained: “If I look at our top 200 customers, more than two-thirds of them already have science-based targets for their emissions. And the vast majority of the rest are working on it.” 

But he added: “While they are all committed to the agenda, and they would like to work with us, there’s a costly reality. A lot of our customers are working in industries and businesses that are super-competitive, with slim margins. “ 

This has left shippers “stuck with the choice between going green and the financial consequences of it”, with green fuels two to three times more expensive than conventional fuels, according to Mr Kildahl.  

“It places our customers in a dilemma between doing the right thing and the affordability element.”  

And he added that even the additional price of penalties, such as ETS and FuelEU Maritime, make little difference to the price of traditional fuel when compared with alternatives. 

“If you end up with a $20 a ton abatement penalty, it’s not going to help anything. If you end up with $150, it will help a lot,” he said.  

Indeed, The Loadstar previously reported that shippers would likely opt to pay “insignificant” penalties as a strategy for complying with the upcoming FuelEU Maritime regulation, rather than seeking to adopt greener fuels. 

Mr Kildahl added: “That’s where we are looking to legislators, we are looking to politicians, the authorities here in Europe and the rest of the world to try to make sure that we all do what we can. 

“If we could have an environment where we are able to penalise the ‘black’ fuels and support the ‘green’ fuels, and take that dilemma away from the customers, then why not do it? And we believe we can.” 

Maersk, with a number of other shipping lines, has backed the World Shipping Council’s Green Balance Mechanism(GBM) to the International Maritime Organization (IMO) that aims to close the price gap between fossil and green fuels 

“There are some important IMO discussions going on right now… it’s super important that we get some of those legislations… Shippers shouldn’t need to look between what is cheap and what is the right thing to do, we can make both things work,” Mr Kildahl concluded.  

The GBM applies a fee on fossil fuels and allocates these funds to green fuels so that the average cost of fuel is roughly equal.