Transformation is all around us and, as we look to the next decade and beyond, we can see that the world is changing fast. Key to this change is the ground-breaking agreement on CO2 emissions, “The Paris Agreement for Shipping”, brokered at the International Maritime Organization (IMO) in 2018. The strategy sets out to halve GHG emissions from shipping by 2050 and provides a clear signal to industry and governments alike.
This important signal represents more than a mere change in the way a ship moves through the ocean. It also represents the catalyst for a fundamental transformation in the business of shipping, something that we at the International Chamber of Shipping (ICS) call the “4th Propulsion Revolution”.
As a leading international trade association for merchant shipowners and operators, representing all sectors and trades, and more than 80% of the world merchant fleet, ICS takes its role in shaping the future of shipping very seriously. Indeed, this is why we started the thinking around the 4th Propulsion Revolution.
Rather than waiting to see what happens, we have worked with the other major shipowner associations to submit a proposal to the IMO to form the world’s first collaborative shipping R&D programme to help eliminate CO2 emissions from international shipping.
The proposal includes core funding from shipping companies across the world of about USD 5 billion over a 10-year period.
The IMO GHG reduction goals will require the deployment of new zero-carbon technologies and propulsion systems, such as green hydrogen and ammonia, fuel cells, batteries and synthetic fuels produced from renewable energy sources, as early as the next decade. However, as of today these technologies do not exist in a form or scale that can be applied to large commercial ships, especially those engaged in transoceanic voyages. The reality is that we can’t afford to wait if we are to decarbonise the shipping sector and catalyse the deployment of commercially viable zero-carbon ships by the early 2030s.
The R&D Fund will be financed by shipping companies worldwide via a mandatory R&D contribution of USD 2 per tonne of marine fuel purchased for consumption by shipping companies worldwide. This will generate about USD 5 billion in core funding over a 10-year period.
To be clear, the fund does not act as a Market Based Measure (MBM) or “carbon tax”. Its purpose is simply to accelerate development of low-carbon and zero-carbon technologies and fuels that will be needed in the commercial maritime sector.
If we are to deliver a sustainable transition that ensures a robust future for the shipping sector, we need to act, and we need governments to support what is an innovative proposal.
Image courtesy of ICS.
What does decarbonisation mean for the shipping industry? Yee Yang Chien, MISC President and Group Chief Executive Officer, talks about turning words into action as part of the company’s pragmatic approach to perpetuation. Read more here.
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