LONDON (BLOOMBERG) - The shipping industry has an ambitious plan to cut its carbon footprint and take the fight against climate change into its own hands.
Shipowner associations representing more than 90 per cent of the global merchant fleet are seeking to create a US$5 billion (S$6.78 billion) research fund to help develop more environmentally friendly fuels and propulsion systems. They'll submit the plan to the International Maritime Organization, a branch of the United Nations, on Wednesday (Dec 18).
The fund aims to help the shipping industry develop commercially viable zero-carbon emission vessels by the early 2030s. The sector faces an IMO target of curbing greenhouse gas emissions by 50 per cent from 2008 levels by 2050. Industry groups supporting the fund include BIMCO, Intercargo and the International Chamber of Shipping.
"We must not leave it to others to carry the burden of addressing the climate crisis," said Mr Guy Platten, the Chamber's secretary general. "Nor will we ask others to decide the future of maritime."
Money for the fund would come from a mandatory US$2 per ton tax on marine fuel bought by shippers over a 10-year period. It's to be spent on research into greener alternatives - such as ammonia, fuel cells and synthetic fuels from renewable energy sources - which don't yet exist in a form that can be applied to large, commercial ships that cross the world's oceans. Fuel is the single-largest cost for a shipowner.
With the expected increase in global trade, vessels will have to become increasingly efficient to meet the IMO's target for lower emissions, according to the Chamber.
The fund's backers expect their proposal to be discussed at an IMO meeting in London that starts in March. The plan is to have it in place by 2023. Ships would hold a certificate to prove that they have paid.
"You can't get round it," Mr Platten said in an interview. "You have to pay the money."