Shipping Industry Supports Decarbonization Fund

US$5 Billion IMO Maritime Research Fund

An international proposal to establish a US$5 billion program to decarbonize shipping has been welcomed by the industry, with governments backing plans to create a new maritime research fund.
The proposal has been put forward by a group of major shipping nations and backed by the United Nations and a group of associations spanning the full breadth of the shipping industry, including: BIMCO, CLIA, IMCA, INTERCARGO, Interferry, International Chamber of Shipping, INTERTANKO, IPTA and the World Shipping Council.

“Responding to the UN Secretary-General’s call for “urgency and ambition” on climate change, the entire global shipping industry is giving 'full and unequivocal' backing to a moon-shot proposal submitted by governments, to catalyze the complete decarbonization of maritime transport by deployment at scale of zero-carbon ships within a decade,” the associations said in a joint statement.

Johan Gahnstrom, Director of Shipping Operations at LOC in London, welcomed the news, highlighting the shift in focus from industry: “LOC are pleased to see that decarbonisation is taken seriously by the industry and we congratulate this initiative. Research and development in emerging technologies is vital, but the solution is not straightforward and choosing which technology to fund will be the gamechanger. How bankable it will be to retrofit or build new fleets will depend on a number of drivers, varying by vessel type and purpose amongst other factors. One of the main issues in shipping is the quantities of carbon neutral fuel needed and how to produce and distribute this to the global shipping fleet. There is further research required on both engines and batteries required as well. And there also needs to be a robust strategy for supporting infrastructure such as ports and refuelling facilities. We look forward to be a part of this solution moving forward.”

Mandatory Contributions

The proposed funding would come from mandatory contributions from the world’s shipping companies, coordinated via a group of governments that between them control a major share of the world’s shipping tonnage. The multibillion-dollar levy would then be used to create an IMO Maritime Research Fund overseen by a new International Maritime Research and Development Board (IMRB).

“The shipping industry is urging all governments to approve this mature moon-shot proposal – led by major shipping nations including Georgia, Greece, Japan, Liberia, Malta, Nigeria, Singapore, Switzerland – at a critical IMO meeting in London in November 2021, which will coincide with the next UN Climate Conference (COP 26) in Glasgow,” the associations said.

Applied R&D
The funding is expected to go towards collaborative programs for the applied research and development of zero-carbon technologies in the first instance. This will include solutions for specific maritime applications and the creation of working prototypes. It will also assist CO2 reduction projects in developing countries, including Pacific island nations.

“Decarbonization has become a global imperative and a priority for governments, companies and society at large which, in turn, are making commitments and increasing efforts to close the gap to net-zero emissions,” said Rajeev Chopra of consultancy Deloitte, in a research note.

It is hoped that funding will support the scaling up of new technologies for large ocean-going ships and decarbonize more than 80 percent of global trade, impacting 2 percent of global emissions.

“The big challenge is not building a single zero-carbon ship; the big challenge is creating the technologies needed to decarbonize the entire global fleet at speed and scale. The sooner the IMO Maritime Research Fund is established, the sooner industry can develop zero emission ships to decarbonise maritime transport,” a spokesperson for the industry associations said.
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