A global shipping consortium is proposing a levy of $2 per metric ton of bunker fuel for research and development to help eliminate carbon dioxide (CO2) emissions from the industry.
The proposal, which would raise $5 billion over 10 years, will be considered at the next meeting of the International Maritime Organization’s Marine Environment Protection Committee (MEPC). The goal is to accelerate funding for commercially viable zero-carbon shipping by the early 2030s.
The industry is hoping the new International Maritime Research and Development Board will jump-start research that will be useful for ships that enter service in the late 2020s or 2030, and also identify transitional fuels for existing vessels, said Kathy Metcalf, president and chief executive officer of the Chamber of Shipping of America. The CSA is a member of the International Chamber of Shipping, one of the backers of the research program.
“We need to have a globally coordinated research and development effort to address the issue of transition fuels and plan for what comes next,” Metcalf said.
The program is part of an industrywide effort to ensure that shipping meets the ambitious carbon-reduction targets agreed to by IMO member states in 2018. The goals include cutting greenhouse gas emissions by 50 percent by 2050, regardless of shipping volumes. Meeting that goal would require improving carbon efficiency by 90 percent, which is impossible using fossil fuel. The research program could be put in place by 2023 by amending the International Convention for the Prevention of Pollution from Ships (MARPOL).
A number of transitional fuels for existing ships are under consideration, including liquefied natural gas (LNG). The research program would identify the most promising ideas and fund those for further development.
“It would be great to fund all of them, but you’re not going to be able to do that, so this program will sort out the ones that show the most promise,” Metcalf said.
The program would not be a substitute for market-based carbon emissions taxes or trading fees that may be levied in the future.
“The industry prefers a bunker levy (for research and development) because it’s easier to manage, and it’s a totally different issue than market-based measures,” Metcalf said.
Current efforts to reduce carbon emissions include the IMO’s 0.5 percent sulfur fuel cap that went into effect Jan. 1. Some compliance options, however, are coming under fire. Some states have banned discharges from open-loop scrubbers, which are used to capture emissions on vessels that do not use low-sulfur fuel. Ports in Malaysia and China have banned dumping the fluids containing pollutants into the water, and the Suez Canal has prohibited discharges during transit. That means vessels must switch to a closed-loop operation, store the discharge or switch to the 0.5 percent fuel.
Beyond LNG, zero-carbon options that show promise include hydrogen and ammonia fuel cells. Electric vessels are performing well in closed-loop runs, and biofuels are also a possibility. Biofuels face engineering challenges, however, based on their composition.
The $5 billion initiative could be considered the industry’s moon shot, a high-stakes research and development effort to create technology that’s unimagined at the moment.
“There is no such thing as an intelligent guess on this, because there are things out there that we don’t even know about now,” Metcalf said.