ICS tries once more on “Fund and Reward” GHG discount proposal

ICS is proposing Fund an Reward GHG reduction approach

Image: ICS

The International Chamber of Shipping (ICS), which represents over 80% of the world’s service provider fleet, has submitted a revised proposal to the International Maritime Organization (IMO) that reaffirms the business’s dedication to fulfill 2050 web zero carbon objectives and units out the complete particulars of how this may be achieved by way of a “Fund and Reward” system.

This is the newest go spherical in a protracted collection of business makes an attempt to fund delivery’s inexperienced transition by some type of levy on carbon and appears, basically, to be a tweaked model of a plan proposed by ICS final October.

The Fund and Reward mechanism could be financed by a compulsory contribution by ships per tonne of CO2 emitted. The funds collected would go to an IMO fund that might reward first movers on stopping CO2 emissions through the use of various fuels corresponding to methanol, ammonia and hydrogen, sustainable biofuels and artificial fuels plus new applied sciences together with carbon seize.

In the brand new submission, ICS has set out particulars of how a compulsory flat fee (levy-based) contribution by ships could be collected by an IMO Maritime Sustainability Fund. ICS says the contribution by ships per tonne of CO2 emitted may very well be set by IMO at a comparatively low stage and nonetheless be enough to slim the worth hole between various and traditional fuels.

In addition to funding the rewards program for the uptake of low and zero-carbon fuels, the contributions by delivery corporations would generate billions of {dollars} yearly to assist the manufacturing of other marine fuels in growing international locations. The fund may also be obtainable to de-risk the rollout of the brand new bunkering infrastructure that will probably be required on an accelerated timescale.

“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,” stated Simon Bennett, Deputy Secretary General of the International Chamber of Shipping. “Our immediate goal is to ensure that some kind of levy-based global economic measure will be prioritized for rapid finalization by the IMO Marine Environment Protection Committee at its next meeting in July. This critical meeting of governments is also expected to adopt a formal net zero target for shipping which will only be truly credible if a measure such as that proposed by the industry is taken forward immediately.”

The stage of contributions to the IMO fund could be a choice for governments. However, ICS has urged that whole funds of about $10 billion a yr – which might require an preliminary contribution quantity of about $50 per tonne of marine gasoline oil consumed – may very well be enough to fund a rewards program up till about 2030 whereas additionally offering tens of billion {dollars} to assist maritime GHG discount tasks in growing international locations.

ICS says that, on the earlier Marine Environment Protection Committee (MEPC 79) in December 2022, there was growing assist amongst governments for an financial measure that might present the world fleet with the wanted incentive to successfully speed up the vitality transition.

To help a choice at MEPC 80 in July 2023, the newest ICS “Fund and Reward”submission supplies further details about the GHG discount measures to be prioritized for growth, and explains the core components of the mechanism that should be finalized and the variables that can decide the preliminary amountof the contribution by ships and the reward fee for the usage of eligible various fuels. The submission additionally units out a full regulatory bundle, together with urged amendments to MARPOL Annex VI, to reveal how the Fund and Reward mechanism may be adopted by IMO member states by 2024.