Industry calls for adoption of ‘moon-shot’ $5 billion R&D fund

Governments controlling a major share of the world’s shipping tonnage submitted today the proposal to the UN International Maritime Organization (IMO) to establish a $5 billion Maritime Research Fund.

The fund would be formed by using mandatory contributions from the world’s shipping companies.

The $5 billion would be collected over the 10 to 15 years life of the programme via a mandatory contribution equivalent to $2 per tonne of fuel oil consumed, using the mechanism already established by MARPOL Annex VI for the Fuel Oil Data Collection System.  

 The proposal is being submitted by the governments of Georgia, Greece, Japan, Liberia, Malta, Nigeria, Singapore, and Switzerland.

It is co-sponsored by all of the world’s major international shipowners’ associations including BIMCO, Cruise Lines International Association, IMCA, INTERCARGO, INTERFERRY, International Chamber of Shipping, INTERTANKO, IPTA, and World Shipping Council.

The proposal takes forward a concept first proposed by the shipping industry in December 2019, initial consideration of which by IMO (MEPC 75) was delayed until November 2020 due to COVID-19.

The fund is aimed at supporting collaborative programmes for the applied research and development of zero-carbon technologies, specifically tailored for maritime application, including development of working prototypes. It also aims to assist CO₂ reduction projects in developing countries, including Pacific island nations.

The new proposal addresses various legal operational, administrative, legal and governance aspects put forward by governments at MEPC 75.

The proposal coincides with the calls for ‘urgency and ambition’ on climate change from the UN Secretary-General António Guterres.

The proposal will be reviewed at a critical IMO meeting in London in November 2021, which will coincide with the next UN Climate Conference (COP 26) in Glasgow.

“The big challenge is not building a single zero-carbon ship, the big challenge is creating the technologies needed to decarbonize the entire global fleet at speed and scale. The sooner the IMO Maritime Research Fund is established, the sooner industry can develop zero-emission ships to decarbonize maritime transport,” the industry organizations said in a joint statement.

The fund is seen as a crucial vehicle to drive the needed progress in developing zero-carbon technologies and fuels that will enable the shipping sector to meet its decarbonization goals.

Having in mind that shipping financing has been on a downturn and the impact of the COVID-19 pandemic on availability of financing topped with the fact that global economies are facing a recession, a global fund to help bridge the investment gap to switch to alternative fuels and zero-emission technologies seems more important than ever.