Fund and reward proposal goals to incentivize inexperienced gas first movers. [Image: ICS]
The International Chamber of Shipping (ICS), which represents 80% of the world’s service provider fleet, has submitted a proposal to IMO calling for a “fund and reward” system to speed up the maritime sector’s transition to web zero by financially rewarding ships and vitality producers that put money into low/web zero emission fuels.
The fund and reward system could be financed by necessary flat charge contribution by ships, per tonne of CO2 emission. It stays to be seen whether or not this newest proposal shall be any extra profitable than earlier trade proposals to fund delivery’s inexperienced transition by some type of levy on carbon stays to be seen.
This time round, ICS is proposing that contributions from the worldwide fleet be gathered in an “International Maritime Sustainability Fund.” Such a fund, the chamber says, may increase billions of {dollars} yearly, which might then be dedicated each to narrowing the worth hole, globally, between current excessive carbon marine fuels and different fuels, in addition to supporting a lot wanted funding in growing nations for the manufacturing of recent marine fuels and bunkering infrastructure. The assist of growing nations shall be required to get the wanted regulatory framework adopted. The structure of that framework is predicated on the trade’s earlier proposals for an IMO R&D Fund.
The fund, says ICS, would reward ships in keeping with annual reporting of the CO2 emissions prevented by way of “eligible alternative fuels.” For instance, a ship fueled by ammonia (amongst many different different fuels together with methanol, hydrogen, sustainable biofuels and artificial fuels) may gain advantage to the tune of $1.5 million a yr.
ICS says {that a} detailed influence evaluation undertaken for it by Clarksons Research has recognized {that a} monetary contribution of as much as roughly $100 per tonne of CO2 emitted wouldn’t trigger what it calls “disproportionately negative impacts on the economies of states.” Additionally, ICS believes that contributions may initially be set a lot decrease after which be topic to a 5-year overview as rising portions of recent fuels turn out to be obtainable.
The ICS fund and reward (F&R) proposal combines components of various recent GHG reduction proposals, together with these from numerous governments, plus a flat charge contribution system beforehand proposed by ICS and INTERCARGO, and concepts lately put ahead for a worldwide IMO measure by the European Union.
“With the ICS fund and reward proposal, IMO member states have a new but very short window of opportunity to put in place a global economic measure which can kick start the development and production of alternative fuels for shipping. To achieve net zero mid-century, these new fuels must start to become available in significant quantities on a commercial basis no later than about 2030,” says ICS Chairman Emanuele Grimaldi. “Compromise is always difficult but, in any negotiation, having a proposal like this can enable everyone to come together. I hope this proposal will act as a bridge between the climate ambitions of both developed and developing countries so that no part of the global shipping industry will be left behind.”
