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SHIPOWNER ORGANISATIONS PLEDGE TO RAISE US$5 bn FOR DECARBONISATION

Wednesday, December 18, 2019 

A consortium representing the global maritime transport industry - comprising BIMCO, Cruise Lines International Association, Intercargo, Interferry, International Chamber of Shipping, Intertanko, International Parcel Tankers Association and World Shipping Council - has submitted a proposal to form an R&D programme to help eliminate CO2 emissions from international shipping.

The proposal includes core funding from shipping companies across the world of about US$5 billion over a 10-year period, and aims to establish a new non-governmental Research & Development organisation to pave the way for decarbonisation of shipping, and accelerate the development of commercially viable zero-carbon emission ships by the early 2030s.

The consortium states that International maritime transport carries around 90% of global trade and is currently responsible for about 2% the world’s anthropogenic CO2 emissions.  To achieve the Paris Agreement’s climate change goals, rapid decarbonisation is vital – and despite shipping's already good environmental credentials, the industry feels it needs to do more, through the IMO, which has responsibility for regulating the reduction of CO2 emissions by international shipping. This industry-wide move to accelerate R&D is necessary to ensure the ambitious CO2 reduction targets agreed to by IMO Member States in 2018 are met.

Those 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 cannot be achieved through continued long-term use of fossil fuels by commercial shipping. 

Meeting the IMO GHG reduction goals will require the deployment of new zero-carbon technologies and propulsion systems, such as green hydrogen and ammonia, fuel cells, batteries and synthetic fuels produced from renewable energy sources.  These do not yet exist in a form or scale that can be applied to large commercial ships, especially those engaged in transoceanic voyages and which are currently dependent on fossil fuels.

The shipping industry is proposing 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 IMRB will be financed by shipping companies worldwide via a mandatory R&D contribution of US$2 per tonne of marine fuel purchased for consumption by shipping companies worldwide, which will generate about US$5 billion in core funding over a 10-year period.  This core funding generated from the contributions is critical to accelerate the R&D effort required to decarbonise the shipping sector and to catalyse the deployment of commercially viable zero-carbon ships by the early 2030s.

Although the R&D programme and its funding is an initiative of the leading international shipowners’ associations, additional stakeholders’ participation is welcomed.  A global fund can be established quickly, and the shipping industry is confident that other stakeholders will want to contribute, potentially generating substantial additional funding for R&D.

In a proposal to the IMO, the industry has set out details for governance and funding of the coordinated R&D programme, which can be put in place by 2023 via amendments to the existing MARPOL Convention. The industry’s proposal is expected to be discussed by governments in London at the next meeting of the IMO Marine Environment Protection Committee in March 2020 

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