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IBIA comments on IMO’s GHG strategy to MEPC 78

17 Jun 2022

The International Bunker Industry Association (IBIA) on Tuesday (14 June) published an article commenting on IMO’s GHG strategy revision, including IMO’s levels of ambitions (GHG reduction targets), that were discussed at MEPC 78:

There are strong signals that the revision of the IMO’s Initial Strategy on the reduction of GHG emissions from shipping will bring much more ambitious targets, significantly speeding up the sector’s transition to a carbon-neutral future. Agreement on the revised IMO GHG Strategy is still some way off.

The IMO’s Marine Environment Protection Committee continued discussions on the revision of IMO’s greenhouse gas (GHG) strategy at its 78th session last week (MEPC 78, 6-10 June), making no decisions, but after intense debate agreed to holding to hold an intersessional GHG working group (ISWG-GHG 13) before the next session (MEPC 79, 12-16 December 2022). The revised strategy is due to be approved at MEPC 79 with a view to adopting a revised strategy in mid-2023 at MEPC 80. There will be further sessions of the working group prior to MEPC 80 as well.

MEPC 78, like MEPC 77, once again saw a large number of Member States supporting a complete phasing out of GHG emission from shipping by 2050, compared to the current 50% reduction target. 

There were also proposals to strengthen the level of ambition for 2030, and to introduce additional milestones with targets to be met between 2030 and 2050.

There was, however, opposition to this approach from a significant number of Member States. They argued that it is premature to strengthen 2030 targets, that phasing out GHG from shipping by 2050 is not a realistic target, and would have a heavy impact on international trade and possible restrict trade. 

The impacts on developing states from the costs associated with the energy transition was stressed again and again. Increased freight rates as ships face higher fuel bills, and the cost of setting up production and supply infrastructure for carbon neutral fuels are major concerns.

Moreover, there were calls for the revision of the IMO’s GHG strategy to be evidence-based, not just focusing on targets, with a need for more data and a feasibility study before setting realistic goals.

The above, in a nutshell, summarises some of the main lines of division between Member States at the IMO. There are also varying views on the specific policies to support the IMO’s levels of ambitions (GHG reduction targets), such as how to calculate emissions from shipping (well to wake, or only tank to wake); the exact form, function and magnitude of market-based measures; and various other proposals for regulations to put shipping and the marine fuel supply industry on a path to reach short, mid-term and long-term GHG reduction targets.

IBIA took the floor during MEPC 78 to express our views on some of these issues.  

Regarding the calls for the revision of the IMO’s GHG strategy to be evidence-based, IBIA’s IMO representative, Unni Einemo, said: “We recognise the desire and need for analysis, reviews and impact assessments associated with the IMO’s GHG strategy, but we must also recognise that it is not possible at this stage to fully and accurately predict availability of solutions in 2050, or the full impact of 2050 reduction targets. Nevertheless, various stakeholders need clear targets to reach for; we need that certainty to have confidence in the investments required. The IMO has committed to adopting a revised GHG Strategy in 2023, so we believe an ISWG dedicated to this subject will be needed to make progress, which is evident from the various concerns raised. Moreover, agreeing now to dedicate an ISWG to the revision of the IMO GHG Strategy does not pre-empt the outcome.”

IBIA has not stated a specific position regarding the level of ambition for 2050, but we have noted the proposals for a “zero emissions” target, and therefore lent our support to a proposal from ICS.

Einemo told MEPC 78: If, as many have proposed, the revised GHG strategy ends up with an ambition to completely phase out GHG emissions from international shipping by 2050, we support the change of terminology to using “net zero” GHG emissions as outlined in MEPC 78/7/2 by ICS. This gives the flexibility to take full well to wake lifecycle emissions into account, which we see as a crucial element to ensure the IMO’s GHG policy is holistic and not causing increased GHG emissions elsewhere.”

IBIA also took the opportunity to comment on other proposals.

“Regarding MEPC 78/7 by the WSC, this document contains several elements that could help us in the task of reducing GHG emissions from shipping. For example, the idea of Green Corridors could be aligned with proposals for the phasing in of a GHG fuel standard, which in our view is an element that will be needed to send a clear demand signal.

In a similar vein, we note with interest the proposal in paragraph 16 of MEPC 78/7/24 by the US, to consider new formulations for the levels of ambition, such as calling for a percentage share of the deep-sea fleet to run on zero-emission fuels.

Both the Green Corridor concept and the US proposal would work alongside the idea of combining a GHG fuel standard requirement with pooling, meaning a group of ships could achieve such targets rather than individual ships. Pooling could provide the same overall net emission reductions from international shipping, but facilitate a gradual uptake in the global fleet of fuels and technologies that cannot be used directly by existing ships due to major technical barriers.

We wonder if there is also a way to combine pooling and Green Corridors with elements proposed by Japan in MEPC 78/7/5 to reward early adopters of low or zero emission ships, to provide incentives for first movers.

Combining these various elements could serve the purpose of providing certainty of demand for those investing in production and supporting supply infrastructure of carbon-neutral fuels and technologies, while achieving specific GHG reduction targets for the global fleet in a way that allows the gradual phasing in of ships that are ready to use new fuels and technologies,” Einemo told MEPC 78.

It is clear from MEPC 78 that the revision of the IMO’s initial GHG Strategy to decide on levels of ambition will be challenging, as will discussions on the further regulations that will be needed to meet those ambitions.

 

Photo credit: IBIA
Published: 17 June, 2022

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