This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
The liner shipping industry remains highly regulated across ­multiple fields. Two areas stand out because of their large impact on the industry and because they affect people outside of shipping: reducing the sulfur content of fuel and drastically lowering greenhouse gases (GHG).
Jan. 1, 2020, is the effective date for the new international regulation that limits the sulfur content of marine fuel to 0.5 percent worldwide, IMO 2020. Intense focus on the costs associated with this new measure continues, and that is an issue that the market will resolve. What is equally challenging is to ensure that the regulations are implemented and enforced so they do not distort competition and they do not penalize responsible companies for complying. We must have a level playing field in the implementation of this regulation.
Turning to climate change, the IMO has adopted an ambitious goal of cutting GHG emissions from shipping in half by 2050, even as cargo demand is expected to grow, and taking those emissions to zero by the end of this century.
The only way to reach the decarbonization goal is to find new fuels for deep-sea vessels. That will require research and development efforts on a scale and schedule that is not happening today. In order to catalyze this essential R&D work, WSC and industry partners will submit a proposal to establish an international research and development entity through the IMO to direct and fund the necessary R&D efforts.
We have called this proposed entity the International Maritime Research Board, or IMRB. The IMRB would be funded by mandatory contributions based on fuel use, which the IMO already tracks. The money would be used to fund research by a wide range of entities around the globe, from research institutions to national laboratories to independent institutions and companies. The work would evaluate which technologies have the greatest potential and then do the engineering needed to make those fuels and technologies commercially viable.
We must transition from the political debate on greenhouse gases into the engineering work of eliminating GHG emissions, and that means making a big investment in R&D, starting now.