The Naval Architect: April 2020
Since 2017, Danish Shipping has seen a growth of 7% in its number of ships and has surpassed its 10% target increase in operational tonnage. As its flagged fleet continues to grow, so does its potential influence on international framework conditions, which it intends to utilise during R&D proposal discussions scheduled to take place at MEPC.
At a recent press briefing, it warned that efforts to meet 2030 and 2050 carbon targets will be futile without the implementation of appropriate mandatory funding. “No matter what we do in terms of short-term measures, no matter how much we are getting more efficient on the fleet we already have, we will never get to carbon neutrality, or to 50% reduction in 2050, if we don’t have the right R&D up and running to find new carbon neutral fuels,” insists Anne Steffensen, Danish Shipping’s director general and CEO.
Announced in January, the International Maritime Research Fund (IMRF) initiative proposes a mandatory US$2 surcharge for every tonne of bunkered fuel. Its proponents, including the International Chamber of Shipping, claim the scheme could generate US$5 billion over a 10-year period to be fed into global R&D decarbonisation projects, though it remains unclear how the funding would be distributed between potential OEMs.
Danish Shipping will support the proposal at MEPC 75 and attempt to influence IMO to make further discussions at MEPC 76, as it believes this to be the best means of accelerating decarbonisation. Maria Skipper Schwenn, executive director for security, environment and maritime research, comments that since the fund is being proposed is an amendment to MARPOL its implementation could be accelerated. Schwenn adds that the organisation also plans to push IMO to have the R&D fund fully functioning by 2023.
As the fifth largest flag registry (calculated by operating tonnage), Danish Shipping could foster its own independent R&D funding, but believes IMO involvement to be essential. “Otherwise you would always have companies around the world who wouldn’t contribute if it was a voluntary measure. That’s why we need a mandatory measure adopted by the IMO,” says Schwenn.
Steffensen admits that, although undesirable, it will be impossible to avoid a competitive landscape between existing R&D funds, but hopes for regulatory equality. “What we want to see is a global level playing field in terms of how we are going to meet a high degree of carbon neutrality,” she adds.
Although Danish Shipping would be fulfilling its own targets once its fleet achieves carbon neutrality, Steffensen believes that shipping’s social obligations go beyond this. Notably, the Danish government has set a more ambitious target of a 70% reduction in CO2 by 2030 for country’s land-based emissions. “The challenge of climate change is so big that nobody can rest on their laurels and say ‘we have solved our small part of the problem’. We need to see this on a bigger scale and, as an industry, be ready to take responsibility for getting the whole supply chain carbon neutral.”
The cooperation of land-based sectors and other industries in the realisation of a global carbon neutral supply chain could be a pipe dream, as ultimately IMO’s remit does not extend to onshore operations. But Steffensen hopes that with the introduction of the project by IMO, other industries will fall into line. “Shipping is not going to solve this (GHG emissions) by itself. We hope that when this fund is up and running, we will be able to have other parts of the supply chain involved, in order to get the correct structures in place for the future.”
