Shipping industry proposes mandatory $5bn R&D fund for decarbonisation

The $5bn funding over 10 years would come from shipping companies across the globe for a new non-governmental Research & Development organisation to pave the way for decarbonisation of shipping. The aim would to accelerate the development of zero emission vessels by the early 2030’s in line with the IMO’s targets for CO2 emission reductions from shipping.

The proposal put forward by the International Chamber of Shipping (ICS), Cruise Lines International Association (CLIA), Bimco, Intercargo, Intertanko, Interferry, World Shipping Council (WSC), and International Parcel Tankers Association will  be discussed by governments next meeting of the IMO Marine Environment Protection Committee in March 2020.

The proposal envisages the establishment of an International Maritime Research and Development Board (IMRB), a non-governmental R&D organisation that would be overseen by IMO Member States.

“The coalition of industry associations behind this proposal are 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,” said Esben Poulsson, chairman of ICS at the announcement of the proposal.

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The IMRB would be funded via a mandatory $2 per tonne bunker levy, which would provide the $5bn funding over the 10 year period. The shipping industry is confident other stakeholders will want to contribute to the fund making for potentially substantial additional funding.

Simon Bennett, deputy secretary general of the ICS commented: “$2 a tonne will generate about 5 billion dollars over a ten 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.”

Governance and funding of the IRMB could be in place 2023 through amendments to the existing IMO Convention for the Prevention of Pollution from Ships (MARPOL).

Guy Platten, secretary general of the ICS said: “Greta Thunberg is right to say that ‘creative accounting and clever PR’ often lie behind supposed commitments to sustainability, but our plans are transparent, and our regulator has teeth. Now we ask the wider shipping community for their blessing. Change on this scale is difficult and often daunting. But in this case, it could not be more necessary. “

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Speaking about the proposal UK Chamber of Shipping Chief Executive Bob Sanguinetti, said: “This new multi-billion-dollar fund is a game-changing development. It shows just how serious the industry is about reducing its emissions and tackling climate change. It is a huge step in the right direction to achieving net-zero emissions by 2050.”

IMO targets include an absolute cut in the sector’s total greenhouse gas emissions of at least 50% by 2050, regardless of trade growth, with full decarbonisation shortly after. The 2050 target will require a carbon efficiency improvement of up to 90%, which is incompatible with a continued long-term use of fossil fuels by commercial shipping.