ICS: Back Our Decarbonisation Fund Idea or Trillions of Dollars Could be Wasted

The ICS thinks money could be wasted without its R&D fund idea. File Image / Pixabay

The International Chamber of Shipping has reiterated its support for a small levy to be imposed on bunker sales to build a decarbonisation research and development fund, saying a failure to do so could see trillions of dollars wasted.

The idea was first mooted by the ICS and various other shipping bodies last December, and will a topic of discussion at next week's session of the IMO's Marine Environment Protection Committee (MEPC). The plan would be to impose a $2/mt levy on bunker sales to build a $5 billion fund that could be used to research decarbonisation options for shipping.

"A failure by governments to support the industry's initiative to accelerate R&D risks trillions of dollars of investment being misallocated, making it impossible for the sector to decarbonise," the ICS said in a statement on its website Wednesday.

"Currently, zero carbon fuels are not available at the size and scale needed to drive decarbonisation.

"While there are several promising potential zero-carbon fuels and technologies, the emissions reductions called for by the international community and industry require a huge amount of research and development before they can become viable.

"This represents a 'financial iceberg' for the industry, as pressure to regulate emissions is currently moving faster than supply chains' ability to keep pace.

"Without innovation and a massive scaling-up of research and development, there is a significant risk of stranded assets that will impact nation states, the finance community and the shipping industry."

The shipping body has published a new report this week looking at ammonia, hydrogen and fuel cells and batteries as alternative marine power sources.

Global commodity trader Trafigura earlier this year said the $2/mt levy idea "can and should be built on," but "would neither significantly affect fuel costs nor likely have a material impact on the development of alternative fuels."