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The US$5 billion Maritime Research Fund quandary

All eyes are now on the International Maritime Organisation’s (IMO) position

COP26 ended with strong views from both camps on creating the US$5 billion IMO Maritime Research Fund (IMRF) to reach net zero by 2050. While the shipping industry reportedly wanted the fund in place by 2023, IMO is now left to fend for itself at the upcoming Marine Environment Protection Committee meeting.

Multiple underlayers in question
The purpose of the IMRF was to research and develop zero emission technologies for shipping. Unfortunately, it was only the “concept” that garnered positive reception. The issue of financing ruffled feathers, as one of the ways mentioned to raise the amount was by imposing levy – at US$2 per tonne of marine fuel consumed.

Bud Darr, Executive Vice President for Maritime Policy and Government Affairs from Mediterranean Shipping Company Group (MSC) called for an immediate green light in frustration. He asserted, “Shipowners had already said they would support financially. The IMO should step aside, get over the political differences and let shipping get on with it. Let us pay!”

Michael Parker, Chairman of Citi’s Global Shipping, Logistics, Offshore business had a different take; particularly the involvement of aviation in this subject. He went as far as to differentiate the businesses: shipping is an essential conduit for the economic and industrial operation of the planet, while aviation serves as a people business driven by individual choice.

Parker’s compelling statement set the stage for the industry to be cautious of consumers’ possibly bearing the brunt through inflation given levies would lower profit margins. He stressed, “Consumers are watching and know a lot more about global supply chains than they used to. They know about the importance of the white van outside the front door.” The billion-dollar question now is: would the IMO step up and be firm with its decision or attempt to buy more time? It is a tough balancing act and the chain of implications from trade to political may be another conundrum.

 

Marine Online Media Team
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