ICS sends fund and reward green proposal to IMO

The International Chamber of Shipping (ICS) has sent a submission to the International Maritime Organization (IMO) fleshing out its fund and reward proposal to get the industry on a green track, after previous decarbonisation plans from the lobby group had failed to garner interest in recent years.

The revamped proposal calls for shipowners to make mandatory contributions per tonne of CO2 emitted to create a new IMO fund to be established by 2024.

The fund will reward uptake by shipowners of low and zero-carbon fuels, and provide funding for alternative fuel production and bunkering infrastructure in developing countries.

In the new submission, ICS has set out details of how a mandatory flat rate, levy-based contribution by ships will be collected by an IMO maritime sustainability fund. To achieve consensus among governments, ICS maintains how the contribution by ships per tonne of CO2 emitted can be set by IMO at a relatively low level and still be sufficient to narrow the price gap between alternative and conventional fuels. The funds collected would be used to reward the uptake of alternative fuels by first movers, based on the CO2 emissions prevented.

Simon Bennett, deputy secretary general of the ICS, commented: “The fund and reward mechanism put forward by ICS is intended to be as simple as possible for IMO to establish. With political will, it can be readily adopted via the existing IMO MARPOL Convention by 2024, so that our commitment to net zero by 2050 can remain plausible given the enormous challenge of transitioning the entire global industry to new fuels and technologies in less than 30 years.”

ICS is keen to get some form of a levy-based global economic measure prioritised for rapid finalisation by the IMO Marine Environment Protection Committee (MEPC) at its next meeting in July.

The level of contributions to the IMO fund will be a decision for governments. However, ICS has suggested that total funds of about $10bn per annum – which would require an initial contribution quantum of about $50 per tonne of marine fuel oil consumed – could be sufficient to fund a rewards programme up until about 2030 whilst also providing billions of dollars to support maritime GHG reduction projects in developing countries. Earlier ICS proposals had sought about $5bn a year.