Shipping Industry Urges Governments to Act Swiftly on $5 Billion Decarbonization Fund

With the conclusion of the International Maritime Organization’s MEPC 76 meeting, several major shipping industry bodies are calling on governments to make good on their word and not waste any more time in moving forward with decisive action to support the decarbonization of the industry.

Specifically, a joint statement by organizations including BIMCO, CLIA, INTERCARGO, INTERFERRY, International Chamber of Shipping, INTERTANKO, IPTA and World Shipping Council, urges governments to act an industry-backed $5 billion R&D Fund program for shipping.

Known as the International Maritime Research and Development Board (IMRB), the IMO-supervised program would accelerate research and development of low-carbon and zero-carbon fuels and technologies used in marine transport, to be financed through a $2 per tonne tax on fuel consumed by every ship.

While governments at MEPC 76 agreed to continue work on the program, discussions at the IMO will need to wait until the next meeting of the Marine Environment Protection Committee (MEPC 77) in November to continue.

“The R&D fund has been thoroughly developed over the past three years. It is the only concrete proposal on the table and can be agreed and put in place by 2023. Governments rightly call for innovation and for decarbonisation to happen now. This is now, and we need IMO member states to move forward and allow us to accelerate the R&D needed without further delay,” the industry organisations said.

The IMO has set a target of reducing total shipping emissions by at least 50 percent by 2050, compared to 2008 levels, with the United States and the EU now calling for zero emissions shipping within the next 30 years. In order to succeed, the industry will need zero-carbon ships capable of trans-oceanic voyages by 2030. But, the organizations note that the technologies for operating deep-sea vessels on zero-carbon fuels are not yet available and current R&D efforts are insufficient to achieve that goal.

“We urgently need to expand and accelerate R&D around zero-carbon technologies and fuels. But innovation does not come for free. To catalyze innovation, the industry is willing to provide guaranteed funding of 5 billion USD at no cost to governments, giving all nations equitable access to the work and the technologies the fund advances. So, what are we waiting for?” the shipowner organizations said.

UN IMO General Secretary Kitack Lim opened by MEPC 76 by making it clear that “Failure is not an option.” Now more engagement is needed for concrete regulatory and technological progress, the organizations say.

“The R&D fund proposal is mature and ready for approval, and the industry has already committed to doing the work needed to establish the fund, a payment system, and the funding necessary. We can do this now, and for the sake of our climate and future generations, we must.”

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