December 18, 2019 / 12:07 AM / a month ago

Ship industry proposes $5 billion research fund to help cut emissions

FILE PHOTO: Container ship RDO Concord sails through the Suez Canal as Egypt celebrates the 150th anniversary of the canal opening in Ismailia, Egypt November 17, 2019. REUTERS/Mohamed Abd El Ghany

LONDON (Reuters) - Shipping associations have proposed creating a research fund with $5 billion raised by the industry to develop technology to help the sector meet U.N. targets on cutting emissions.

The global shipping fleet, which accounts for 2.2% of the world’s CO2 emissions, is under pressure to reduce those emissions and other pollution. About 90% of world trade is transported by sea.

International shipping associations called on Wednesday for a mandatory contribution of $2 per ton on fuel used by ships to raise money for a research fund to help develop cleaner technology for the industry.

U.N. shipping agency, the International Maritime Organization (IMO), aims to cut the industry’s greenhouse gas emissions by 50% from 2008 levels by 2050, a target that will require the swift development of zero or low emission fuels and new ship designs using cleaner technology.

Simon Bennett, deputy secretary general of the International Chamber of Shipping, one of the industry bodies backing the fund, said a $2 per ton fuel contribution would raise about $5 billion over 10 years, based on fuel consumption by the world’s fleet of about 250 million tonnes a year.

“We can’t exaggerate the pressure we are under if we are going to meet the IMO 2050 targets. We really have very little time,” Bennett told Reuters. “Ship owners are increasingly realizing that we have to really get on with this now.”

The fund, if it receives the backing of IMO member states, could be in place by 2023, officials involved said.

The IMO said the proposal would be discussed by the organization’s Marine Environment Protection Committee at its next meeting at the end of March.

“Research and development will be crucial, as the targets agreed in the IMO initial strategy will not be met using fossil fuels,” an IMO spokesperson said.

Editing by Edmund Blair

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