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The International Chamber of Shipping (ICS) has submitted a detailed proposal for a Zero Emission Shipping Fund to IMO.
Recognizing the urgent need to advance workable solutions to achieve ambitious net-zero targets, global shipowners are raising billions of dollars annually to reduce greenhouse gas emissions from their ships. ICS states that it agrees to the contribution obligation.
The shipping industry’s latest proposal is jointly proposed by the Bahamas and Liberia, two of the world’s largest flag governments, measured by gross tonnage. The proposal is based on the “febate” concept advocated by the Japanese government and EU countries’ support for a flat levy-based global contribution system at the IMO.
Importantly, this latest proposal adds transparency and accountability structures for how the billions of dollars raised are used, including funds earmarked for use in developing countries.
Guy Platten, ICS Secretary General, explained: If you don’t, you won’t succeed. ICS fully supports the net zero target agreed by the IMO for shipping. The 2050 target will only be possible if government negotiators commit to developing the regulations necessary to establish a Zero Emission Shipping Fund. Next year, there is an urgent need to agree on a global greenhouse gas pricing mechanism for shipping, which will de-risk investments in greenhouse gas-free marine fuels and support developing countries. Billions of dollars in funding will be provided. ”
He says if we can’t reach a take-off point for zero GHG marine fuel production and absorption by 2030, it will be difficult to see how we will achieve net zero by 2050. It is carefully laid out. All that is needed is the political will from governments to implement this fit-for-purpose solution quickly and effectively. ”
The Zero Emission Shipping Fund and ‘feebate’ mechanism will be considered by IMO member states at the next round of GHG negotiations in March. Governments have already unanimously committed to developing a GHG pricing mechanism for international shipping by 2025. If governments agree, a fund will be approved next year to help shipping achieve net-zero greenhouse gas emissions by or near 2050, in line with ambitious GHG reductions. Targets adopted by IMO member countries.
Under this proposal, contributions from ships per tonne of CO2e emissions would be used to reduce the significant cost differences between GHG-zero fuels and conventional fuel oils, prevented by the use of these new marine fuels. Ships will be provided with a financial reward (feebate) for their GHG emissions. .
The proposal includes support for zero or near-zero marine fuel production and the deployment of new fuel supply infrastructure at ports in developing countries around the world, as well as support for training in the safe use of new fuels. included.
A detailed impact assessment has already been carried out by Clarksons Research for the ICS, and the contribution rate, which adds costs ranging from $20 to $300 per tonne of fuel oil consumed, will It is emphasized that there will be no undue negative impact on the economy. freight price.
ICS will reduce the cost gap with conventional fuel oil and reduce the We calculate that the cost will be commensurate with promoting the spread of oil. Alternative fuels would cost $5 billion to $10 billion a year.
ICS suggests that generating $5 billion to $10 billion a year may require contributions of ships to the Zero Emission Shipping Fund worth about $20 to $40 per tonne of fuel oil consumed. are doing. However, the actual contribution rate will be higher depending on the amount of funds that IMO Member States decide to raise through the Fund for a separate IMO GHG Marine Sustainability Fund to support developing countries.
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