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The Singapore Shipping Association (SSA) has announced that it is in favour of the introduction of an International Compensation Fund (ICF), which would be financed by a levy on bunker fuel.

SSA President, Mr S S Teo said “This Compensation Fund for the shipping industry, when adopted under the auspices of the IMO should be universally applied across the board to enable a level playing field for all industry players. The Funding mechanism should be transparent, rigorous, enforceable and deliver measurable reductions.

The development of this Fund will provide a stable and pragmatic platform for the shipping industry to assess its performance,” Teo said.

The SSA emphasized, however, that the GHG Compensation Fund, when adopted by the IMO, should have provisions enacted that recognize and reward progressive operators who develop or deploy environmentally friendly technology for their ships, as well as provisions to incentivize the development of innovative green technologies.

Teo added, “Bearing in mind our ultimate commitment to reducing GHG emissions, however, we should remain open to any other proposals that can demonstrate predictability, universal application, a genuine and demonstrable reduction in emissions as well as stimulate innovation and research of new technologies.”

“It is very important that the IMO should retain the ability to control legislation for the shipping industry rather than allow unilateral, politically–motivated legislation being introduced."

Earlier this week, the Baltic and International Maritime Council (BIMCO) said that an International Compensation Fund is the best market-based instrument.

Of the proposals for Market Based Instruments (MBI's) submitted to the Marine Environment Protection Committee (MEPC 59) meeting, BIMCO said the Danish proposal for an IMO International Compensation Fund is the instrument that best meets IMO's nine fundamental principles.

BIMCO added that it was also behind the proposals for an Energy Efficiency Design Index for new ships as a mechanism for emission reduction.

The world's largest private shipping organization said "BIMCO, having considered environmental strategies at our recent Athens General Meeting, supports, in principle, an Energy Efficiency Design Index, as a broad measure of energy efficiency, although we recognise that there may be issues with ship types designed specifically to cater for particular transport needs."