LAST Week's Straits Talk focused on the proposal proposed by the International Chamber of Shipping (ICS) to accelerate decarbonization of the global commercial fleet.

Simon Bennett, Deputy Secretary General of ICS, responded to my views as follows:

"ICS thanks the Singapore Business Times for explaining the shipping industry's recent proposal to its global regulator, the International Maritime Organization (IMO), for funding and incentive (F&R) measures to accelerate decarbonization of shipping and help it achieve net zero carbon dioxide emissions by 2 years..."

"However, the author of the article" Is Shipping Setting the Right Route for Zeroing "suggests that the measure needs more scrutiny before the International Maritime Organization creates what he calls the first" global tax system, "and he is" troubled by the idea of global tax bureaucracies collecting and allocating billions of dollars."

"It needs to be clear that what is proposed is not taxes, as the government will not collect or pass any funds. On the contrary, with the full support of the industry represented by the world's shipowners' associations, including the Singapore Shipping Association, a donation system is being proposed to help the industry maintain control over its fate. The main purpose of adopting the IMO Fund is to narrow the price gap between traditional marine fuels and alternative fuels." The goal is to encourage energy producers to produce low-carbon and zero carbon fuels, as well as pioneer absorption of them. By 2030, the "take-off" point will be reached, and the entire global industry will be completely decarbonized by 2050.

"The incentive system for preventing carbon dioxide emissions through the use of qualified alternative fuels will be relatively easy to manage and do not require a large amount of bureaucracy. This is because the contribution of ships to the International Maritime Organization Fund for each ton of carbon dioxide emissions, as well as the incentive rate for ships to use qualified alternative fuels to prevent each ton of carbon dioxide emissions, will be determined by regulations and managed through fully automated systems. The industry has A prototype has been developed using the existing IMO fuel oil data collection system, through which the annual fuel consumption of ships has been verified by an approved recognized organization on behalf of the National Maritime Administration (e.g., Singapore MPA).

"Although a small portion of the total funds raised may be used to support the offshore decarbonization efforts of developing countries, the vast majority of the funds collected will be used to reward ships using low-carbon and zero carbon fuel or carbon capture technologies, and will not enter the government's" treasury "..."

"Given the incredible scale of the challenge of achieving 'net zero' emissions in this' difficult to reduce 'shipping industry in less than 30 years, the industry has concluded that this will not be achieved through additional technical regulations. Therefore, it will be crucial to reach an agreement on certain economic measures to stimulate rapid transformation, while shipping can only play a role globally through the International Maritime Organization.".

So, am I convinced? Well, to some extent, yes. I do admit that taking the F&R path in politics is very meaningful. This week, I had some detailed conversations with Bennett on the way to collect taxes. I am not so worried about "taxes". However, we are still talking about a lot of money. I still believe that if technical regulations are needed, these technologies, especially carbon capture, can be developed in a timely manner.

However, given that the F&R proposal is already on the table and the current political options are bleak, the International Maritime Organization is likely to follow this path.