Following the conclusion of this week’s meeting of MEPC 78, the International Chamber of Shipping (ICS), has expressed its frustration by governments’ rejection of R&D Fund to catalyse sector decarbonisation.
Namely, Guy Platten, ICS Secretary General, commented that “by refusing to take forward the shipping industry’s proposed research and development fund, the IMO has wasted its opportunity to kick start a rapid transition to zero-carbon technologies which will be vital if we are to decarbonise completely by 2050.”
Despite the support of many IMO States, we have been frustrated by short-sighted political manoeuvring which has led to the proposal in effect being killed. The signal this sends means that the financial risk associated with green investment will remain high, slowing down efforts to switch to zero-carbon fuels as soon as possible
As he explained, “some claimed that the fund was a market-based measure and did not go far enough, deliberately misinterpreting our intention. The fund was never presented as a carbon pricing measure, which, although being an additional measure which we also fully support, is politically far more complex and will take many more years to develop.”
If governments had shown the political will, the separate R&D fund could have been up and running next year, raising billions of dollars from industry at no cost to governments
However, Mr. Platten noted that “despite the lack of government leadership at the IMO, the shipping industry remains committed to finding ways of achieving net zero carbon emissions by 2050. Funding for R&D will be top of the agenda at the Shaping the Future of Shipping Summit, to be hosted by ICS in London on 21 June.”
For his side, Simon Bennett, Deputy Secretary General of ICS, added that “in addition to providing half a billion dollars per year to support global R&D programmes, the fund would have provided US$50 million per year to support maritime greenhouse gas reduction projects in developing countries.”
On the positive side, the possibility remains for the IMO to make use of the Fund’s proposed regulatory architecture to underpin a future global carbon levy on shipping’s CO2 emissions, to close the price gap with zero-carbon fuels when they become available and provide significant funds to help expedite the transition to net zero by 2050.
Mr. Bennett mentioned, stressing that “if the contribution system which we have developed can speed up implementation of a global carbon levy for shipping, we may yet be able to look back on this setback at the IMO as a significant moment of success.”
It is important to recall that a group of governments, controlling a major share of world shipping tonnage, have submitted in 2021 a proposal to IMO to establish a $5 billion USD “IMO Maritime Research Fund”, using mandatory contributions from the world’s shipping companies for industry decarbonization. The proposal was submitted by Georgia, Greece, Japan, Liberia, Malta, Nigeria, Palau, Singapore, Switzerland, in response to a call by the UN Secretary-General for “urgency and ambition” on climate change.
MEPC 78 was held remotely from 6 to 10 June 2022, and DNV presented the highlights of the meeting, which included the finalization of technical guidelines for the upcoming EEXI, CII and SEEMP regulations; approval of a proposal for a sulphur emission control area (SECA) in the Mediterranean Sea; and further discussions on the revision of the IMO GHG Strategy scheduled for 2023.
