The Green Balance Mechanism or feebate was proposed by industry leaders such as A.P. Møller-Maersk, an integrated logistics company, to the International Maritime Organization (IMO), through the World Shipping Council. It aims to mitigate the green premium associated with clean fuels in the maritime industry, which will enable an uptake in demand of these fuels while establishing a net-zero fund for R&D projects and climate mitigation initiatives. This innovative approach incorporates a GHG fuel-intensity standard and establishes a fee on fossil fuels, redistributing the collected funds to support clean fuels. By doing so, it creates a strong incentive for fuel providers to invest in clean energy, accelerating economies of scale that will lower production costs and drive down prices.

"The time to act is now if we are to meet our ambitious net-zero by 2050 target. The IMO stands at a pivotal juncture, where the decisions we make will define the future of decarbonizing the shipping industry. What’s needed is a mechanism that bridges the green premium, rewarding early adopters by compensating truly green vessels for their emissions reductions." - Vincent Clerc, Chief Executive Officer, A.P. Møller-Maersk

Stakeholders

International Maritime Organization (IMO), World Shipping Council, A.P. Møller-Maersk and other industry leaders