The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently released preliminary guidance on the implementation of a price cap policy on Russian crude oil and petroleum products.  This policy has major implications for maritime service providers and maritime supply chains.

The price cap policy will be implemented by the United States, together with the G7 and the EU.  The policy has two components: (1) a ban on services related to the maritime transportation of Russian origin crude oil (effective December 5, 2022) and petroleum products (effective February 5, 2022) (collectively referred to as “seaborne Russian oil”), and (2) an exception for services related to shipments of seaborne Russian oil purchased at or below a price cap.  The U.S. ban on the importation of Russian crude oil, petroleum, and petroleum fuels, oils and products of their distillation into the United States will remain in place.

The level of the price cap has not yet been set.  It will be established by cooperating countries via a consultative process.  OFAC anticipates publishing additional, detailed guidance regarding the price cap plan closer to the implementation dates.
Continue Reading OFAC Releases Preliminary Guidance on Implementation of the Russian Oil Price Cap

On September 6, 2021, the International Chamber of Shipping (ICS) announced that it had proposed a global carbon levy on carbon emissions from ships for consideration by the International Maritime Organization (IMO) to “accelerate the uptake and deployment of zero-carbon fuels.”  The International Association of Dry Cargo Shipowners (INTERCARGO) co-sponsored the proposal.

ICS, which represents national shipowner associations and over 80% of the world merchant fleet,  explained in its announcement that the carbon levy “would be based on mandatory contributions by ships trading globally, exceeding 5,000 gross tonnage, for each tonne of CO2 emitted.”  Funds generated by the levy “would go into an ‘IMO Climate Fund’ which, as well as closing the price gap between zero-carbon and conventional fuels, would be used to deploy the bunkering infrastructure required in ports throughout the world to supply fuels such as hydrogen and ammonia, ensuring consistency in the industry’s green transition for both developed and developing economies.”

In this article, we review the developments leading up to this proposal and its prospects, and consider the implications for the shipping industry and supply chains more generally if a global maritime carbon levy were to be adopted by the IMO.Continue Reading Is a Global Maritime Carbon Levy on the Horizon? Why Companies Should be Paying Attention to the IMO Proposals and Preparing for Potential Supply Chain Disruption