Shipowner associations from the G7 nations Group of Seven (G7) nations have pledged to pioneer the construction of a $5 billion decarbonization research and development (R&D) fund, and have solicited contributions from governments.
The G7 shipowners' associations, as well as those from Australia, India, South Africa, and South Korea, comprise the "maritime seven" (M7). They have together urged governments around the world to support this funding initiative, which would subsidize the development of technology that would result in a cleaner, greener maritime sector.
“We fully support the need to decarbonize, and if the industry is to achieve its goal of zero carbon emissions by 2050, significant investment in research and development is required, as we simply will not have the technologies necessary to create the greener, cleaner shipping industry that we all desire,” said John Denholm, President of the UK Chamber of Shipping, following the M7 meeting.
The campaign for the fund closely followed the G7 summit in Cornwall, England, when world leaders pledged to protect the planet by backing a green revolution that creates employment, reduces emissions, and attempts to limit global temperature rise to 1.5 degrees Celsius.
Additionally, the leaders pledged to achieve net zero emissions by 2050, reducing aggregate emissions over the next two decades by 2030, expanding and enhancing climate finance, and conserving or safeguarding at least 30% of land and oceans by 2030.
While finance has been highlighted as a significant barrier to decarbonizing the maritime industry, governments, firms, and industry stakeholders have been hesitant to invest cash in research and development, despite repeated requests for the establishment of a fund. The Maritime and Port Authority of Singapore (MPA) has established an independent $90 million fund to support the establishment of a decarbonization center and the financing of research and development initiatives.
Despite accounting for 90% of worldwide trade, the shipping industry is facing growing criticism for being one of the largest contributors to carbon emissions. According to International Maritime Organization (IMO) estimates, the maritime industry emits around 940 million tonnes of carbon dioxide each year, accounting for around 2.5 percent of global greenhouse gas (GHG) emissions.
The movement to make the shipping sector more environmentally friendly is gaining momentum. A group of 23 top maritime corporations and organizations signed a memorandum of understanding for a "joint study" to investigate common challenges regarding ammonia as an alternative marine fuel. To satisfy the IMO's carbon reduction requirements, new alternatives such as green ammonia and green methanol would be essential.
Additionally, the project intends to aid in the construction of ammonia-fueled boats and a global supply chain for ammonia.
“From an emissions reduction and scalability standpoint, ammonia is viewed as a possible future fuel for shipping. However, safety, technology maturity, and price continue to be significant barriers that must be overcome,” said Jérôme Leprince-Ringuet, TotalEnergies Vice President Marine Fuels.