1. What inspired the new idea?
    • Deadlock and a deteriorating political context for multilateral progress;
    • Recent developments in Africa and Europe, which have increased the likelihood of a patchwork of regulations for international shipping, something the industry strongly wants to avoid;
    • Increasing openness to act on climate change from liner companies, such as Maersk.

  2. How could this idea disrupt a market?
    • It would bring joint action on climate change in the international shipping sector, where governments have failed due to its global nature;
    • Additional investment in innovation and efficiency improvements would reduce shipping fuel and thus emissions, over the short- and long-term, including bringing forward the emission peak, potentially by 10 years, avoiding more than 5 gigatons of CO2 emissions;
    • 1$bn of climate finance could be generated for the most vulnerable annually, even with a contribution as low as $10 per container, impacting millions of lives.

  3. How is this idea unique?
    • Shipping companies act individually not as an entire sector. Yet significant benefits can be achieved through joint action, including reducing waiting times and congestion at ports;
    • Shipping companies await a global regulation that is unlikely to materialise. If they don't act as an industry, a patchwork of regional and national regulations is the likely outcome - a nightmare scenario for the global industry to comply with, and without bringing any direct benefits to shipping;
    • A simple contribution per container is proposed instead of a levy or market based mechanism based on ship fuel consumption. This is more transparent and acceptable to all stakeholders as it would not distort competition.

  4. What are the revenue streams?
    • Revenues would be generated from the contribution per container unloaded, proposed at US$10 per standard container (TEU). The contribution would be applicable to full containers. Given that well over 100 million containers are shipped internationally by sea, the total contributions would amount to more than US$1 billion;
    • Payments for value added services and licensees from non-participants.

  5. What is the market the idea will be entering? What is the Unique Value Proposition?
    • International liner shipping is a global but concentrated industry. The top 10 and 20 companies represent nearly 70% and 90% of the global container capacity, respectively. Many of these already speak with one voice on environmental issues through the World Shipping Council, which represents 90% of the industry (WSC). The 28 companies represented by WSC carry over 100 million containers annually.
    • Currently there is no alternative proposal, in particular involving long term innovation and bringing the sector's emisssion peak forward.

  6. What about key business questions: company benefits, free-riding versus sector benefits, and costs?
    • Increased efficiency from additional investments would save money & offset the contribution per container. Even if this were not the case, company profits still not affected as costs passed on.
    • Free-riding is constrained by access to benefits; the sector will win by avoiding a patchwork of regional regulations.
    • The potential increase in import prices, if any, is estimated to be negligible: circa 0.03% (3 cents per $100).