Shipping Giants Ask Watchdog to Avoid Biofuels in Green Push

(Bloomberg) --

Some major shipping lines including Hapag-Lloyd AG and Louis Dreyfus Armateurs are calling on the International Maritime Organization to avoid backing crop-based biofuels as the industry pushes to decarbonize.

“Unless legally-binding safeguards are introduced, there is a risk that a large amount of fossil fuels will be replaced with unsustainable biofuels,” the companies said in a joint statement released by the European Federation for Transport and Environment, a non-governmental organization known as T&E. When deforestation and land use are taken into account, palm and soy are two to three times worse for the climate than traditional fuels, according to T&E.

The IMO — which oversees shipping within the United Nations’ framework — is working toward a net zero greenhouse gas emissions target for the industry by mid-century as part of global efforts to combat climate change. Shipping carries more than four-fifths of world trade and still relies on traditional fuels to power most of the fleet.

Most palm oil is grown in vast estates in Southeast Asia, with Indonesia and Malaysia the largest producers. The commodity has long been blamed for destroying fragile habitats including carbon-rich peatlands, reducing biodiversity and endangering rare animals — claims that producers and governments in the region have rejected.

The alert from shipping companies comes as the IMO hosts an event in London this week to debate measures to reduce the sector’s carbon footprint. The regulator is expected to make further progress on emission-reduction rules at major meetings in the spring and fall of this year.

“We call on the IMO and member states to discourage the use of crop-based biofuels by ships,” the companies said. Crop-based biofuels should not benefit from economic incentives directed toward promoting zero and near-zero emission fuels, they said.

In a separate statement, dozens of conservation organizations criticized a proposal from Brazil — a major soybean producer — that backed biofuels as a long-term solution for shipping. They also called on the IMO’s member states to oppose the promotion of biofuels in the industry.

(Updates with future meetings on emissions rules in fifth paragraph and IMO post. A previous version was corrected to reflect that Louis Dreyfus Armateurs was a signatory in first paragraph.)

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