Green investments

The sea is looking so green

by Port News Editorial Staff

In a world that needs to accelerate on decarbonisation to combat ongoing climate change, innovative solutions are needed but, above all, investment is needed.

ICS, BIMCO, WSC, Intertanko, Intercargo, CLIA, Interferry e IPTA,know all about this; they have brought an ambitious proposal to the International Maritime Organization‘s negotiating table.

The idea, presented by the eight shipowners’ associations, is to open a special fund for research and development in the field of environmental sustainability at the IMO.

The ceiling will be financed directly by shipowners, who will have to pay $2 for every tonne of fuel oil consumed by each of their ships.

Considering that the 70,000 ships in the world consume a total of 290 million bunkers every year, the fund could reach $5 billion in a decade.

This effort, according to the proposers, could lead the sector to decarbonise shipping almost completely by 2030, anticipating in some way the already ambitious objectives of the IMO report entitled ‘Decarbonising Maritime Transport Pathways to zero-carbon shipping by 2035’, which shows that the deployment of all currently known technologies could lead to a low carbon future by 2035.

“The coalition of industry associations supporting this proposal – said Esben Poulsulsson, President of ICS – is showing real leadership. The maritime industry must reduce its CO2 emissions to meet the ambitious challenge set by the IMO. Innovation is therefore crucial if we want to develop the technologies that power the fourth maritime propulsion revolution.”

The ceiling will be the ‘piggy bank’ to dip into when developing various research and development projects. The initiatives will be coordinated by a special Board of experts, the International Maritime Research and Development Board (IMRB), which will operate over a period of no more than 15 years.

The research activity should focus, among other things, on the development of alternative fuels (such as Liquefied Natural Gas, still little used because it is too expensive and scarcely available in ports) and the implementation of new types of technology aimed at improving ship energy efficiency

The proposing associations would like to make the financing of the fund legally binding. Mandatory payment is not intended to affect free market initiative but could be used to correct imbalances and reduce possible distortions of competition.

However, the sector is already troubled with the new burdens of IMO 2020: the now imminent entry into force of stringent limits on sulphur content in ship emissions (1st January 2020) has in fact forced many companies to start an intensive retrofitting programme over the last few months to equip their ships with modern exhaust scrubbers . A new “eco-tax” imposed by law could therefore have an even more negative impact on the already ruined balance sheets of many shipping companies, eroding the profitability margins of a business in which ship bunkering already accounts for 40% of operating costs.

For the eight associations, however, the burden of financing the fund should fall not only on the shipowners but also on the charterers. The idea is clear and has been expressed over the last few days by the deputy secretary-general of the International Chamber of Shipping, Simon Bennett: if the charter agreement specifies that the charterer is to bear the fuel costs, then the charterer has to contribute to making the International Maritime Research Fund work.

The initiative has been praised by Confitarma’s leading figure, Mario Mattioli, who in a press release issued by the Association says: “These are not mere projects – added Mattioli – over the last few years Italian shipowners have shown their commitment to reducing emissions from their ships. We hope that over the course of time this fund will have an impressive budget comparable to the automotive investments in research for alternative fuels”.

As reported by Lloyd’s List, the proposal will be examined by the IMO’s Marine Environment Protection Committee by April 2020.

Translation by Giles Foster

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