Groups propose $5b fund for low-carbon shipping
Shipping associations across the maritime sector have submitted a proposal to the International Maritime Organisation (IMO), for the establishment of a $5billion Fund, towards research and development programme on the reduction of carbon emission.
The programme aims to accelerate the introduction of low-carbon and zero-carbon technologies and fuels, and coincides with the growing pressure on the shipping industry to cut its emissions.
International maritime transport conveys around 90 per cent of global trade, and is currently responsible for approximately two per cent of the world’s anthropogenic CO2 emissions.
The IMO, shipping’s global regulator, has set targets for an absolute cut in the sector’s total greenhouse gas emissions of at least 50 per cent by 2050, regardless of trade growth, with full decarbonisation shortly after.
Under the proposal, cosponsored by BIMCO, CLIA, ICS, INTERTANKO, INTERCARCGO, INTERFERRY, IPTA, and WSC, the core funding would be collected via a mandatory research and development contribution per tonne of fuel oil purchased for consumption.
Deputy Secretary General, International Chamber of Shipping, Simon Bennett, said: “Even using conservative estimates for trade growth, a 50 per cent total cut in CO2 by 2050, can only be achieved by improving carbon efficiency of the world fleet by around 90 per cent.
“This will only be possible if a large proportion of the fleet is using commercially viable zero-carbon fuels. In practice, if the 50 per cent target is achieved, with a large proportion of the fleet using zero-carbon fuels by 2050, the entire world fleet would also be using these fuels very shortly after, making 100 per cent decarbonisation possible – which is the industry’s goal.
“$2 a tonne will generate about $5 billion over a 10 year period – based on total fuel consumption by the world fleet of about 250 million tonnes per year, which we believe should be sufficient to accelerate the intensive R&D effort we need to fully decarbonise our sector within the ambitious timeline agreed by IMO,” he stated.
The International Maritime Research and Development Board (IMRB), would report to a body of representatives of IMO member states established by the Maine Environment Protection Committee (MEPC), to provide oversight over its activities, including approval of the IMRB’s budget. The supervisory body would report to the MEPC.
It is envisaged that the fund might have a life of between 10 and 15 years. Once the MEPC has concluded that the IMRB has fulfilled its objectives, the IMRB and International Maritime Research Fund (IMRF), would be formally dissolved.
The cosponsors said: “The proposed action is considered critical to achieving the levels of ambition for 2050 and beyond set forth in the IMO GHG Strategy.”
“An effort of this scale is expected to be successful in identifying one or more technical pathways that can lead to the introduction of zero-emission vessels across the maritime sector by 2030 and beyond.”
There are several zero-emission projects under development, but the main challenge is to scale up the production of zero-emission solutions, and make them commercially viable for widespread use by international shipping, especially for transoceanic voyages.
However, as the cosponsors noted that the responsibility for decarbonisation of the sector as a whole is not the sole responsibility of shipping companies, and must ultimately be driven by a broad set of stakeholders.
Chairman International Chamber of Shipping, Esben Poulsson, said: “The coalition of industry associations behind this proposal is showing true leadership. The shipping industry must reduce its CO2 emissions to meet the ambitious challenge that the International Maritime Organization has set. Innovation is therefore vital if we are to develop the technologies that will power the 4th Propulsion Revolution. This proposal is simple, accountable and deliverable and we hope governments will support this bold move.”
The shipping industry’s proposal will be discussed by governments in London at the next meeting of the MEPC in March 2020.