The International Chamber of Shipping reaffirms commitment to 2050 net zero

The Board of the International Chamber of Shipping (ICS), which represents over 80% of the world’s merchant fleet, has submitted a revised proposal to the International Maritime Organization (IMO) that reaffirms the industry’s commitment to meet 2050 net zero carbon goals and sets out the full details of how this can be achieved via a ‘Fund and Reward’ system .

The Fund and Reward mechanism will be financed by a mandatory contribution by ships per tonne of CO2 emitted to an IMO fund, which will reward first movers for the CO2 emissions prevented by the use of alternative fuels such as methanol, ammonia and hydrogen, as well as sustainable biofuels and synthetic fuels plus new technologies including carbon capture.

 In addition to funding the rewards programme for the uptake of low and zero-carbon fuels the contributions by shipping companies will generate billions of dollars annually to support the production of alternative marine fuels in developing countries. The fund will also be available to de-risk the rollout of the new bunkering infrastructure that will be required on an accelerated timescale.

Simon Bennett, Deputy Secretary General of the International Chamber of Shipping commented:

“The Fund and Reward mechanism put forward by ICS is intended to be as simple as possible for IMO to establish. With political will, it can be readily adopted via the existing IMO MARPOL Convention by 2024, so that our commitment to net zero by 2050 can remain plausible given the enormous challenge of transitioning the entire global industry to new fuels and technologies in less than 30 years.

“Our immediate goal is to ensure that some kind of levy-based global economic measure will be prioritised for rapid finalisation by the IMO Marine Environment Protection Committee at its next meeting in July.”

The level of contributions to the IMO fund will be a decision for governments.

 Guy Platten, Secretary General of the International Chamber of Shipping added:“If we are to have a sustainable decarbonised future, governments need to support the shipping industry’s willingness to come forward with innovative measures that can incentivise first movers whilst also providing support to developing countries.”

At the previous Marine Environment Protection Committee (MEPC 79) in December 2022, there was increasing support among governments for an economic measure which could provide the world fleet with the needed incentive to effectively accelerate the energy transition.

The latest ICS submission provides additional information to assist a decision at MEPC 80 in July 2023 about the GHG reduction measures to be prioritised for development, and explains the core elements of the mechanism that need to be finalised and the variables that will determine the initial quantum of the contribution by ships and the reward rate for the use of eligible alternative fuels..