COVID-19 and Emissions Reduction Will Test Maritime Industry

A meeting of the Round Table of Shipping Associations has cautioned on the impact of the COVID-19 virus amid growing fears around the ability to move trade across the world.

The roundtable, which features the chairpersons of the four major maritime associations, BIMCO, INTERCARGO, the International Chamber of Shipping (ICS), INTERTANKO, and held in Roe, warned that the potential implications of the spread of the virus were significant.

“Whilst mitigating the dangers of Coronavirus disease 2019 (COVID-19) to our crews and staff are first and foremost on our minds, the impacts of precautionary restrictions on the shipping industry are becoming increasingly visible, even to the general public,” said Paolo d’Amico, of INTERTANKO who chaired the meeting.

“For shipping, as the industry responsible for the movement of the vast majority of the world’s products, raw materials and fuels, the potential implications of ports and authorities restricting free movement or shoreside support are of utmost importance,” he said.

The round table was looking at the key trends for the maritime market in the years ahead and in the longer term the efforts made to achieve the 50% reduction in greenhouse gas emissions by 2050, set by the International Maritime Organization, are set to test the sector.

The Round table also called for work to begin on a specific R&D fund to aim in steps toward zero carbon emissions.

Last week, prominent European shipowners publicly affirmed the industry-wide consensus that a R&D fund is the shipping industry’s best route forward towards a zero-emission future. The $5billion proposal was put together by industry trade bodies, including BIMCO, INTERCARGO, the International Chamber of Shipping (ICS), INTERTANKO and others, who represent over 90% of the world’s merchant fleet.

Esben Poulsson, Chairperson of ICS said: “It is clear that the entire shipping industry takes its responsibility to limit the industry’s emissions extremely seriously. This is why we jointly submitted plans to place a $2 levy on every tonne of ships’ fuel purchased. The amount was chosen to be acceptable to developing nations. We understand that climate change can only be tackled through truly international cooperation, something that is intrinsic to shipping.”

This proposal will create a $5 billion R&D fund over a 10-year period and will accelerate the development of commercially viable zero-carbon emission ships by the early 2030s. This is the first major R&D initiative of its kind to be proposed by a sector on a global basis. We firmly believe it can provide a framework for other industries to decarbonise.

The fund does not act as a Market Based Measure or ‘carbon tax’. The purpose of the proposal is simply to accelerate the development of low-carbon and zero carbon technologies and fuels for use in the commercial maritime sector. The proposal is not intended to frustrate or delay the development of an MBM, and we believe that it could form the architecture of a future levy-based MBM for shipping, that would reduce the risk of market distortion.

Sadan Kaptanoglu, President & Chairperson of the Board of BIMCO said: “Industry-wide cooperation is absolutely essential if we are to meet the ambitious targets set by the IMO to halve CO2 emissions by 2050. We welcome the decision of our joint Membership to support our proposal to create a $5 billion R&D fund for zero-emission shipping. We hope the IMO recognises the level of support for our proposal.”

“The invention of Teflon, penicillin and the microwave show us that innovation is often accidental. We fully expect the R&D fund to bring benefits that go far beyond the shipping industry, as well as driving down emissions in our sector.”