COLUMN | Did politics kill the shipping industry’s R&D fund? [Grey Power]

What was there not to like about the shipping industry’s carefully thought-out scheme for an international fund that could be used to accelerate the route to a carbon-zero future? Introduced in 2019 to the International Maritime Organisation (IMO) by the principal shipping organisations and supported by a group of governments that actually know something about sea transport, the scheme would have seen a levy on fuel consumed employed to hurry along what needs to be done if decarbonisation is to be achieved.

Listening to some of the greener groups of activists that like to pontificate about decarbonisation, you would think that it is a simple matter for the world fleet to be switched over to sustainable methodologies. It is, they infer, only the intransigence of the ship operators that is slowing the process. And many of these environmental interest groups are now comfortably ensconced as NGOs at the IMO, able to ensure their views (noisily endorsed by their activist chums on the pavement outside) are front and centre in the debates.

The shipping industry scheme – which recognised the huge problems of developing alternative fuels, along with technologies that will meet emission targets, while keeping world trade flowing – was, if nothing else, simple and practical with an International Maritime Research and Development Board supervising the collection of US$2.00 per tonne of fuel consumed, and which could raise over US$5 billion for the necessary programmes. Not only that, but some US$50 million per annum could be disbursed to developing nations to help them meet their targets without which many would struggle. What’s more, according to the International Chamber of Shipping, the scheme could be up and running and funding research by next year. There was, surely, a great deal to commend the scheme.

“What people need to grasp is the sheer scale of marine transport and the competition it will face for its fuel.”

Sadly, if predictably, the latest meeting of the IMO Marine Environment Protection Committee, rejected the industry’s proposals, despite the support it was given by such IMO members as Denmark, Greece, Japan, Liberia, Singapore, Malta, and a number of others.

It isn’t as if there are brilliant alternative ideas coming forward, as the years tick away and the problems facing maritime transportation multiply with every additional green demand. Sure, there are useful efforts being made by sea carriers, machinery manufacturers, and classification societies to test new fuels and clever technologies. Scarcely a week goes by without accounts of exciting things being done with ammonia, or methanol, hydrogen, or biofuels, the ordering of dual-fuel machinery or the use of hybrid technologies, wind, or batteries.

What people need to grasp, however, is the sheer scale of marine transport and the competition it will face for its fuel, with all the other shoreside energy consumers, something that was never the case with the filthy old heavy residues it has become used to burning. It is a vast problem that the shipping industry cannot face by itself and which will require a massive injection of applied science and intensive research.

“There is always the baleful hand of the European Commission, bitterly complaining about the pace of IMO proceedings, while remaining opposed to any scheme that didn’t emerge from Brussels first.”

Why is there such reluctance to accept the industry’s perfectly sensible scheme?

For a start there is a sort of residual suspicion of the motives of the scheme’s proponents – ship-owners, aren’t they only out for themselves and traditionally object to environmental improvements? There is a good deal of vested interests from those who have been pushing for “market-based measures” and the infinitely more complex concept of carbon pricing. There are a lot of interests that enthuse about carbon offsetting and levies that would make a very good living for their managers.

And there is always the baleful hand of the European Commission, bitterly complaining about the pace of IMO proceedings, while remaining opposed to any scheme that didn’t emerge from Brussels first. And at this month’s MEPC, according to a disappointed International Chamber of Shipping official, the rejection of the research fund was the victim of “short-sighted political manoeuvring”, from what might be described as the “usual suspects”.

So the talking goes on, nearly three years after the idea of the fund was launched and an opportunity has been squandered. It’s not that the need for all the R&D can be put off for further years of earnest debate and futile politicking. The fund could have provided the global focus that the problems demand.

Meanwhile, those operating the existing fleet will wrestle with the complexities of the Energy Efficiency Existing Ship Index and carbon intensity reduction requirements. It’s not going to be easy.