The International Chamber of Shipping (ICS) has proposed a global CO2 reduction fund and reward (F&R) system to catalyse the adoption of alternative fuels, which currently cost at least two or three times more than conventional marine fuel.

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The proposal was submitted to the International Maritime Organization (IMO).

The ICS F&R proposal combines elements of various recent GHG reduction proposals from several governments, plus a flat rate contribution system previously proposed by ICS and Intercargo, and ideas recently put forward for a global IMO measure by the 27 EU member states.

ICS’s chairman, Emanuele Grimaldi, said: “With the ICS F&R proposal, IMO member states have a new but very short window of opportunity to put in place a global economic measure which can kick-start the development and production of alternative fuels for shipping. To achieve net zero mid-century, these new fuels must start to become available in significant quantities on a commercial basis no later than about 2030.

“Compromise is always difficult but, in any negotiation, having a proposal like this can enable everyone to come together. I hope this proposal will act as a bridge between the climate ambitions of both developed and developing countries so that no part of the global shipping industry will be left behind.”

The reward rate would be calculated based on CO2 emissions prevented and funded via a mandatory flat rate contribution from ships per tonne of CO2 emitted. The industry body said that the system could be established by 2024, if governments can agree on the regulatory framework at the IMO.

ICS proposes that contributions from the global fleet be gathered in an “International Maritime Sustainability Fund”. Such a fund, the body said, could raise billions of dollars annually, which would then be committed both to narrowing the price gap, globally, between existing high-carbon marine fuels and alternative fuels, as well as supporting much needed investment in developing nations for the production of new marine fuels and bunkering infrastructure.

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