Shipping CEOs to IMO: We need massive decarbonization R&D fund

Written by Nick Blenkey
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MSC CEO Soren Toft: “Some form of global market-based-measure, incorporating carbon pricing, could help the industry to decarbonize”

The CEOs of 17 major container and RO/RO carriers—including Thomas Crowley, owner & CEO, Crowley Maritime, and Matthew J. Cox, Chairman & CEO, Matson Inc.—have written an open letter to the International Maritime Organization that supports the industry proposal for a $5 billion decarbonization R&D fund paid for by some sort of carbon pricing.

Signatories to the letter include Soren Toft, CEO of Mediterranean Shipping Company (MSC). He says that, on top of MSC’s own substantial efforts to boost fleet energy efficiency and trial a range of new fuels and technologies, specific global initiatives are required to help the shipping industry decarbonize.

“Some form of global market-based-measure, incorporating carbon pricing, could help the industry to decarbonize by reducing the price gap between fossil fuels and zero-carbon fuels as they become available,” says Toft. “At the same time, despite our huge investments into our fleet and operations, scalable long-term solutions simply do not currently exist for us to deploy on our ships. There is a gap in R&D to bring these alternative fuels and technologies to the market and the industry wide research fund will help us achieve IMO’s policy targets.”

Today, the only commercially available options to significantly reduce emissions from the shipping industry at scale are: improving energy efficiency, LNG and biofuels, says Toft. While MSC believes that these are crucial elements to consider as part of the energy transition, these options alone will not provide a long-term or full solution. Logistical and technical issues must be solved before new fuels can be scaled up for the shipping industry.

The industry needs a range of alternative fuels at scale and needs them urgently, notes Toft. The main challenges now are to determine the right combination of new fuels and technologies and to implement viable industry-wide proposals to invest in R&D to achieve those goals, and, ultimately, the zero-carbon future.

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