The UCL Energy Institute on Friday (4 October) said the IMO’s Marine Environment Protection Committee 82nd meeting has concluded with a large amount of work remaining.

However, negotiations are still on track for an agreement on a new text to Chapter 5 of International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that would enshrine new mid-term policy measures capable of driving an energy transition in international shipping. 

As the pre-cursor meeting to the expected approval meeting in April 2025, this was not expected to be a meeting that concluded the key policy design elements. But the meeting did produce a full draft text for the MARPOL amendment, within which the details still to be finalised can be clearly identified for further work before April.

According to UCL, three main options remain on the table:

• a flexibility mechanism on its own and no levy/universal price on GHG, 
• a feebate mechanism (associated with a levy/universal price on GHG), and 
• a feebate mechanism combined with a flexibility mechanism. 

Whilst it was not signalled in any way during the meeting as an intent of any member state, it is possible to gain insight into what would happen if a member state called a vote to decide on the outcome. An amendment to MARPOL Annex VI would require a two third majority from member states that had ratified MARPOL. 

If member states voted as per the positions expressed at ISWG-GHG 17, there would be a 76% majority in favour of a levy (35 member states vs. 11 member states who have ratified MARPOL Annex VI). However, this is only indicative and not conclusive, because member states could yet change position (either way), and because there are still a large number of member states silent on the matter, or ambiguous in their position, so far.

Dr Tristan Smith, Professor of Energy and Transport at the UCL Energy Institute, said: “Investors looking to the levy to support business case for early adoption of new technologies and particularly e-fuels, and member states looking to the levy for support for a just and equitable transition, should be optimistic based on this meeting. They will also have to be patient – there is still a lot of work to be done before approval at MEPC 83 in April 2025”.

The topic of impact on states arising from the measures (e.g. transport cost increases that result from the policy measures creating negative economic impacts, particularly on low-income countries) remains a key subject in the discussions and is therefore likely to be important to the way the discussions resolve at MEPC 83. The issue of food security became particularly elevated at this meeting, as many countries raised the issue that increased import prices of critical food commodities due to mid-term measures could increase the existing levels of food insecurity. There will be further work done on this issue with a report to MEPC 83.

Dr Annika Frosch, Research Fellow at the UCL Energy Institute, said: “Discussions at MEPC 82 show a growing majority of countries backing the levy as a stable source of revenue and crucial for a just and equitable transition. While some member states remain opposed due to cost concerns, the levy remains a strong contender among policy designs. If it were to come to a vote, the current positions suggested enough support to pass the measure with a clear majority, though positions may still evolve as negotiations continue.”

Note: UCL Energy Institute’s overview of discussions from IMO MPEC 82 can be downloaded here. 

Photo credit: International Maritime Organization
Published: 7 October, 2024