The maritime industry is at the heart of our interconnected world, playing a vital role in global commerce and connectivity, and at its core, the industry includes the transportation of goods, products, and people across the sea.
In the global context, ships facilitate over 80% of the volume and approximately 70% of the value of world trade, as of 2021. Notably, within the UK due to its island status and proximity to major continents, the shipping industry takes charge of moving and delivering over 95% of global trade by volume, equivalent to around 11 billion tons annually, according to the latest data from 2022. This underscores the sector’s integral role in our daily lives, as nearly all goods we use, consume, or possess have been shipped by sea, reflecting the size and potential of this industry, which remain closely tied to the ongoing demand for shipping commodities and commercial merchandise. Forecasts support this resilience, predicting a sustained upward trajectory, with maritime trade anticipated to grow by 2.4% in 2023 and by over 2% annually from 2024 to 2028.
The Challenges and Solutions for Decarbonising the Maritime Industry
This vast importance and continuous expansion of the sector, highlights the urgent need for its decarbonization. However, the sector’s complexity, size and diversity, makes it very challenging. The maritime industry involves various parties, such as ship owners, charterers, ship management companies, chartering brokers, and classification societies, each with different interests and responsibilities. Moreover, ships have a long lifespan, typically 20 to 30 years, and are not easily retrofitted with new technologies, which still face some barriers in terms of technological readiness or infrastructure. Therefore, the transition to low or zero-carbon will take decades and require a combination of technological, operational, and policy solutions. The main body that sets the regulations for this sector is the International Maritime Organisation (IMO), which aims to reduce carbon emissions from international shipping by 40% by 2030 and 70% by 2050, compared to 2008 levels, as part of its Greenhouse Gas Strategy. The IMO also implemented a change in regulations on 1 January 2020, where sulphur content in fuels reduced from 3.5 to 0.5% or use of exhaust gas cleaning systems, to reduce air pollution from ships. These regulations create a policy pressure on the industry to decarbonise the sector with long-term and permanent solutions.
UK’s Vision and Ambition for Maritime R&D or UK’s Maritime R&D Strategy: A Vision for Innovation and Sustainability
Building on the global efforts to decarbonise the maritime sector, the UK has a clear vision and ambition for the future of its maritime sector, as expressed in Maritime 2050, a strategy developed by government and industry in 2019. It covers seven themes that are essential for the UK to remain competitive and sustainable and provides recommendations and route maps for achieving the various goals. One of the key initiatives that reflects the UK’s commitment to Maritime 2050 is the Clean Maritime Demonstration Competition (CMDC), a multi-year program that funds collaborative R&D projects to develop and demonstrate clean maritime solutions. The CMDC, now in its fourth round, aims to foster innovation and sustainability in the maritime sector, while positioning the UK as a global leader in both aspects in the future. Most of the research projects in CMDC involve solutions like:
- Alternative fuels, such as ammonia, hydrogen, methanol, biofuels, and synthetic fuels.
- Fuel cells and batteries, such as proton exchange membrane fuel cells, solid oxide fuel cells, and lithium-ion batteries.
- Energy efficiency and management, such as waste heat recovery, propulsion optimisation, and smart energy systems.
- Emission reduction and capture, such as exhaust gas cleaning systems, carbon capture and storage, and selective catalytic reduction.
These solutions are expected to foster innovation and sustainability in the maritime sector, while positioning the UK as a global leader in both aspects. There are many research projects and initiatives that are exploring the feasibility and viability of green fuels for maritime transport, such as the Green Maritime Corridors, which evaluates the fuel alternatives methanol, ammonia or hydrogen as applied to a regional fleet of container feeder vessels.
Get on board with RCK Partners: Claim R&D Tax Credits for Your Marine Innovation
R&D tax credits are a government incentive that rewards businesses for conducting research and development activities in the field of science or technology. R&D tax credits can provide financial potential for businesses looking to invest in accelerating their R&D, hire new staff and ultimately expand. However, many businesses in the maritime sector may not realise that they are eligible for R&D tax credits or may not know how to claim them.
To claim tax relief for your R&D activities in the maritime sector, you need to know what counts as R&D and how to apply for it. The amount of tax relief your company can receive depends on the size and nature of your business, the scale and cost of your R&D projects, and whether you are profitable or loss-making SME or large company (RDEC scheme).
Examples of qualifying R&D in Marine Engineering:
- Developing/designing a new or improved marine robotic system or RPI subsea equipment.
- Improve existing methods of producing metal customised parts for marine industry.
- Creating a new or enhanced marine renewable energy device.
- Designing a new hull shape or improving an existing coating process for subsea operations.
- Creating a new software for marine navigation, communication or data analysis.
- Developing a new or improved method for marine biofouling detection and prevention.
These are just some of the many examples of marine innovation that could qualify for R&D tax credits. If you are undertaking any of these activities, or any other activities that involve resolving scientific or technological uncertainties, then you are likely carrying out qualifying R&D. RCK Partners can help you claim your R&D tax credits and support your marine innovation. We can help you identify and maximise your qualifying expenditure, prepare and submit your claims to HMRC, and provide Claim Resolution Services. We can also advise you on how to optimise your R&D strategy and processes, and how to access other funding opportunities for your marine innovation. We have experts from industry with backgrounds in different engineering fields and a strong grasp of the R&D tax credit scheme., who can understand your technical challenges and solutions. Contact us here.
CHRYSI KARAGIANNAKI
ASSOCIATE CONSULTANT
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