THE World Shipping Council has hit back at environmental groups who dismissed an industry-backed decarbonisation research and development fund.

Five environmental non-governmental organisations called on industry groups, including the council, to withdraw their proposal for the R&D fund and instead actively support a different proposal for a $100 per tonne of CO2 levy on all ships.

“You read that right; environmental advocates oppose research and development that will lead to a viable technological pathway to the decarbonisation of international shipping,” council chief executive John Butler said in a statement in response to the NGOs.

This R&D fund would be powered by a mandatory contribution of $2 per tonne of fuel on all ships, with the industry associations estimating it could generate around $500m per year.

The money would go towards supporting maritime decarbonisation R&D projects and would be administered by a new dedicated International Maritime Organization-run institution called the International Maritime Research Board. 

But the environmental groups believe the money that would be raised would be insufficient to make a meaningful contribution and that the negotiations at the IMO over the board's creation will take up valuable time at the expense of negotiations for a market-based measure, such as carbon pricing, which they see as the most urgent priority.

Mr Butler slammed the groups for having what he sees as a “defeatist approach”.

Industry groups, including the WSC, urged the IMO last week to begin negotiating market-based measures as soon as possible in parallel with the International Maritime Research Board.

Mr Butler insisted that carbon pricing and the board can only work together, not alone.

“Decarbonisation of shipping is going to be difficult. If we are to succeed, we need a sophisticated policy response, not a hodgepodge of disconnected regulatory tools enacted as the result of short-term political skirmishes,” he said.

The industry’s argument is that the International Maritime Research Board can help in the development and adoption of the zero carbon fuels and technologies that a market-based measure, like a price on carbon, would push owners towards.

“That is precisely what the IMRB will do, and the sooner we do that essential research and development work, the more effective, and the less expensive, any carbon pricing tool will be. It is not either/or. It is both/and,” Mr Butler said.

The IMO will discuss the International Maritime Research Board proposal during its environmental meeting in June.

It will also address a proposal by the Marshall Islands and the Solomon Islands for the $100 carbon levy.

“What we collectively — governments, industry, and environmental NGOs — cannot succumb to is a reductionist approach that shies away from doing what is necessary even as we try to convince ourselves that doing something less than what is required can be touted as a success,” Mr Butler said.

Industry groups have been pushing for their R&D fund since late 2019 but the proposal has proven controversial at the IMO.

Major shipping nations such as Greece, Denmark and Japan support it, but others such as China, Brazil and India are opposed to the funding mechanism of the mandatory $2 fuel levy, which is a necessity for the fund to exist in its current form.