Without decisive government signals, declining levels of maritime research and development could jeopardize the shipping industry’s ability to decarbonize, warned the International Chamber of Shipping (ICS) ahead the IMO’s MEPC 76 meeting starting this week.
An IEA report released in 2020 revealed that research and development (R&D) spending in maritime between 2007-2019 remained stagnant, lagging far behind that of other sectors, while the total amount of Corporate R&D investment for maritime actually decreased, from 2.7 billion USD in 2017 to 1.6 billion USD in 2019.
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Taking into consideration these findings and, as the landmark MEPC 76 is to start in London on 10 June expected to bring significant decisions on green challenges for the industry, ICS is calling for a clear political signal so that investment can be brought forward to create the technologies needed to decarbonize the industry. With the example of other industrial sectors, governments must send a clear political signal that they are serious about the development of a global market-based measure to create the business models that will incentivize the adoption of these technologies, according to ICS.
This comes as the lack of clarity, in part due to the increasing levels of political risk and resulting investment risk, is leading to limited R&D investment for ‘green’ fuels for ships, and the accompanying technologies they need to be safely used, the Chamber noted.
We have welcomed recent announcements of plans to increase innovation and for zero-emission pilot projects. However, all too often these announcements do not come with cash or a realistic investment strategy. This sends conflicting messages to the market and as a result investment in shipping is becoming riskier with each passing day. We need governments to match their words on decarbonization with tangible action. Investment in research and development relies on certainty of the availability of long-term “patient capital”,
…commented Guy Platten, secretary-general of the ICS.
There is also growing concern about the safety and toxic emission associated with the use of some proposed alternative fuels. Without government support for rapid research and development, this will add unacceptable levels of risk to investments made in shipping by both the public and private sector.
Governments need to look beyond the sales brochures and wishful thinking of others to invest in technologies that are safe and sustainable and without negative side effects for other parts of the environment,
…he added.
In this context, ICS has joined a recent proposal, along with 10 governments and industry partners, for a 5 billion USD R&D fund for shipping to support the ‘de-risking of investments’ for advancing technology readiness levels.
The $5 billion USD International Maritime Research and Development Board (IMRB) provides the ‘patient capital’ that is desperately needed. While this proposal would be funded entirely by industry, we urgently need the support of governments to enable this to happen,
…he noted.
As such, the upcoming MEPC will be a good opportunity for IMO member states to clearly signpost to the industry that international consensus can be found to effect environmental change and reduce political risk, he continued.
If we can’t get political consensus now on the urgent need for R&D how are we going to reach the much-needed political consensus for a sustainable and equitable carbon price signal that will incentivize the market to decarbonize at the speed and scale needed,
…he concluded.
ICS along with other shipping bodies have already called on world leaders to bring forward discussions on global market-based measures.
