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Shipowners float plans for $5 billion fund to catalyze low carbon shipping

Industry body insists it has 'definitely got the memo' on the need for urgent climate action.

Efforts to launch electric, hydrogen and biofuel-powered ships on the high seas could be in line for a $5 billion boost thanks to proposals from the International Chamber of Shipping (ICS) launched Wednesday. 

The ICS, which represents major shipowner bodies around the world, wants shipping companies to invest in technologies that could help the industry decarbonize. 

The proposed fund would see shipping companies pay a mandatory contribution of $2 per tonne of marine fuel, with the proceeds invested in efforts to build commercially viable zero-carbon emission ships by the early 2030s.

The ICS represents seven international shipowner associations, collectively covering all sectors and trades, and over 80 percent of the world merchant fleet.

The shipping sector is aiming to reduce its total greenhouse gas emissions by at least 50 percent by 2050, which would require ships to improve their carbon efficiency by up to 90 percent. That would require a massive reduction in fossil fuel use and the widespread deployment of alternative technologies to power tankers, ranging from hydrogen to batteries. But such technologies are not yet commercially viable and are barely beyond the small scale pilot phase where they have been deployed. 

Meanwhile, environmental campaigners repeatedly have accused the industry of sluggish progress in drawing up its climate plans. Shipowners are not investing nearly enough in new green shipping technologies that will pave the way for future decarbonization, many insist, while some firms and governments stand accused of lobbying against more ambitious climate targets and policies.

Shipowners are not investing nearly enough in new green shipping technologies that will pave the way for future decarbonization, many insist.
Yet speaking to journalists via an online briefing, ICS secretary general Guy Platten insisted the shipping industry "had definitely got the memo" on climate change.

"We need to acknowledge that many of the complaints aimed at shipping have been justified," he said. "In fact, we concede that in the in the past we've been slow to respond to the effect of global heating, and despite working hard to improve air quality and cut our carbon dioxide emissions, we have not done enough."

He insisted the sector is ready to step up to the climate fight, arguing today's proposals that a non-governmental R&D organization could be funded through a mandatory contribution on all fuel purchased show how the industry is serious about slashing emissions.

Under the proposals, the body would be overseen by the International Maritime Organisation (IMO). The ICS said the scheme could be put in place as soon as 2023 by amending the ​​​existing IMO Convention for the Prevention of Pollution from Ships (MARPOL). 

The fund would need to support 200 R&D projects to have a reasonably chance of finding commercially scalable solutions, with funding for individual schemes potentially stretching into the tens of millions of dollars, it added.

However, the proposal still could face some stormy seas as it tries to navigate its way to deployment. The plans would need to be approved by member states of the IMO, and given the scheme's reliance on a mandatory fuel tax it may not win unanimous state support. Discussion of the idea is expected to start in March. 

"We recognize that we'll have to do a lot of selling and persuading with IMO member states," admitted ICS chair Esben Poulsson. "But we wouldn't have proposed this if we didn't think it had a serious chance of being accepted."

The shipping industry has long been accused of hiding in the slow lane when it comes to climate action. The ICS' latest proposal , which plots an investment route to viable green shipping technologies, could be its ticket to a cleaner future.

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