Shipping remains by far the most carbon efficient way to transport the 90 percent of global trade which is carried by sea. 

But despite impressive efficiency improvements, it is still responsible for about 3 percent of the world’s total greenhouse gas (GHG) emissions. So shipping has a vital role to play in helping the world economy get to net zero. 

At a critical meeting in July at the International Maritime Organization (IMO), ICS will call on governments to increase their ambition to achieve net zero GHG emissions from shipping by 2050, and to provide clarity to the industry and marine fuel producers by setting a clear direction of travel.

But knowing where you want to go is only one part of the journey, you have to have the tools to reach your destination.

ICS has made a comprehensive ‘Fund and Reward’ proposal which will be further considered at the next round of IMO negotiations in July at the Marine Environment Protection Committee (MEPC 80). 

The ICS proposal is now gaining traction with governments. Ships will pay a flat rate contribution to an IMO fund which will reward first movers for the emissions prevented by investing in low and zero GHG fuels.

The aim is to reduce the “cost gap” with conventional fuels to make a net zero goal plausible, accelerating the production and uptake of alternative fuels so that we can reach a take-off point by 2030. 

To reach net zero by 2050, the goal is to ensure – in combination with a global fuel standard – that at least 5 percent of the energy used by shipping in 2030 is generated from low and zero GHG fuels, such as methanol and sustainable biofuels, plus technologies such as carbon capture. 

While ICS supports an IMO fuel standard that will mandate the reduction of the GHG intensity of marine fuels, this has to be supported by an economic measure. 

A fuel standard alone will not have the impact we need if we are to make a difference. An economic measure will operate across the world to incentivise the production and use of the low and zero emission fuels necessary to comply with the GHG fuel standard.

The ‘fund and reward’ mechanism proposed by ICS is an equitable measure that will ensure developing countries can use a large proportion of the billions of dollars that would be generated each year, from shipowner contributions, to create the infrastructure of the future, while also incentivising first movers to act. 

Shipowners are willing to pay into a multi-billion dollar global fund, which if structured correctly, will reduce the cost gap between conventional fuel oil and much more expensive low/zero emission fuels as they begin to become available. 

Now we need to see political will from IMO member states to get this mechanism up and running as soon as possible, as time is running out. 

Setting a direction of travel is important, but without the tools to get there, it becomes a meaningless aspiration. 

The world’s governments at IMO have an opportunity to set a practical course for shipping that will get us ever closer to achieving these crucial net zero goals. 

Along with our membership, ICS is optimistic that governments will set a net zero target which sends a strong signal to energy producers and marine fuel suppliers.

It is critical that the decisions that governments make lay out the measures which will enable us to achieve our goals, for the benefit of the entire world not just shipping. 

The shipping industry’s proposal for a ‘fund and reward’ measure, complemented by a global fuel standard, will create opportunities for all and ensure that we reach our desired destination. But the first step is to get us where we need to be by 2030.