IMO puts adoption of $5 billion maritime R&D fund on hold

The International Maritime Organisation (IMO) held its Marine Environment Protection Committee (MEPC 78) meeting last week, taking, in the view of the shipping industry, only small steps towards decarbonising the sector.

IMO’s MEPC has reiterated its commitment to review and strengthen the IMO Initial Strategy on the reduction of GHG emissions from shipping, with a view to adopting a revised strategy in mid-2023.

However, the agreement to establish the International Maritime Research Board (IMRB) and the proposed $5 billion International Maritime Research Fund (IMRF) was not achieved at MEPC 78.

The adoption of the industry-financed and IMO-led R&D fund has been seen as a key step to accelerating the development of technologies for zero-carbon shipping.

Under the proposal made in 2019, the core funding would be collected over a ten-year period via a mandatory $2 R&D contribution per tonne of fuel oil purchased for consumption. The fund would be supervised by the IMO.

Following the conclusion of last week’s meeting, the International Chamber of Shipping (ICS), representing 80% of the world’s merchant fleet, issued a statement.

“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,” Guy Platten, ICS Secretary General, commented.

“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.”

“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,” Platten added.

“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.”

“In addition to providing half a billion dollars per year to support global R&D programmes, the fund would have provided $50 million per year to support maritime greenhouse gas reduction projects in developing countries – a ten-fold increase to the current IMO technical cooperation budget. Sadly, it seems this opportunity to provide immediate help to the likes of Small Island Developing States has also now been lost,” Simon Bennett, Deputy Secretary General of ICS, added:

“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.”

“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.”

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