The IMO member states have agreed to give further consideration to the industry-led proposal for the establishment of a $5 billion research and development fund aimed at accelerating the introduction of zero-emission technologies into the shipping industry.
The fund is being proposed as the shipping industry attempts to centralize and streamline investment into research and development into relevant projects and scale them up in order to avoid significant amounts of money becoming stranded.
Under the proposal made in 2019, the core funding would be collected over a ten-year period via a mandatory $2 R&D contribution per tonne of fuel oil purchased for consumption. The fund would be supervised by the IMO.
The international shipowner associations making this proposal, which collectively represent all sectors and trades and over 90% of the world merchant fleet, are BIMCO, ICS, INTERTANKO, INTERCARGO, CLIA, INTERFERRY, World Shipping Council, and INTERNATIONAL PARCEL TANKERS ASSOCIATION.
The concept was included in the agenda of the IMO Marine Environment Protection Committee (MEPC) held last week, and saw governments invoke numerous issues with regard to its implementation.
The International Chamber of Shipping said that these included questions about governance and IMO oversight, the need to take account of the economic impact on states of the proposed mandatory R&D contribution, and the need to address the interests of Least Developed Countries (LDCs) and Small Island Developing States (SIDS).
“The industry is eager to work with governments to ensure that this initiative is implemented as soon as possible, aiming for the International Maritime Research and Development Board (IMRB) to be operational by 2023,” ICS said.
“ With $5 billion in core funding over a 10-year period, generated from industry contributions, the IMRB will create the technological and investment certainty to spur innovators, engineers, energy companies, shipyards, financial institutions, and engine manufacturers to accelerate the R&D effort required to decarbonise shipping.”
The fund is seen as a crucial vehicle to drive the needed progress in developing zero-carbon technologies and fuels that will enable the shipping sector to meet its decarbonization goals.
Having in mind that shipping financing has been on a downturn and the impact of the COVID-19 pandemic on availability of financing topped with the fact that global economies are facing a recession, a global fund to help bridge the investment gap to switch to alternative fuels and zero-emission technologies seems more important than ever.