After a week of intense greenhouse gas (GHG) negotiations at the United Nations International Maritime Organization (IMO), the International Chamber of Shipping (ICS) stressed the urgent need for progress ahead of the critical Marine Environment Protection Committee (MEPC 83) meeting in April.
“While ICS is broadly satisfied with the progress made on a bold new package of global GHG reduction regulations, including a GHG emissions pricing mechanism, significant work remains,” said Guy Platten, ICS Secretary General. “Despite divergences on several issues, it is encouraging to see continued positive and cooperative negotiations.”
With just six weeks remaining before the MEPC 83, Platten expressed confidence that IMO Member States would be able to reach a consensus and approve amendments to the MARPOL Convention that are fit for the purpose.
Universal GHG Emissions “Levy”
While no breakthroughs were made toward a final agreement on a universal “levy” for ships’ GHG emissions, a proposal widely backed by the shipping industry as a key mechanism for achieving net-zero emissions by 2050, there is promising support from around three-quarters of IMO Member States. This includes backing from the ‘50-plus group’ of governments and ICS for the GHG contribution system. However, to build full consensus, concerns raised by countries like China and Brazil must be addressed straightforwardly and practically.
Progress on IMO Fund Agreement
A notable positive outcome of the negotiations was broad support for establishing an IMO Fund, a concept long championed by ICS. It is expected that the fund, which could generate billions of US dollars annually from charges on ship GHG emissions, will be used to provide financial incentives for early adopters and ships utilizing zero-emissions fuels (ZNZ), such as green methanol, biomethane, green ammonia, and sustainable biofuels. These incentives are seen as crucial for reducing the cost gap between conventional marine fuels and alternative, cleaner options while also spurring the production and adoption of these fuels.
GHG Fuel Standard
Although significant details remain unresolved regarding the proposed GHG intensity fuel standard, ICS is encouraged by the continued consideration of its simpler proposal. This would impose GHG surcharge fees on ships unable to comply due to fuel availability constraints. Importantly, this approach has garnered widespread support from developing countries, offering a more transparent and straightforward system compared to a complex one requiring ships to trade compliance units, which could result in unpredictable and volatile pricing.
Another key issue for shipowners is whether pooled compliance among different shipping companies will be allowed, given the anticipated limited availability of compliant marine fuels.
Bridging the Gaps
To drive progress, ICS will continue to put forward practical and constructive proposals, particularly on the critical issue of economic incentives for the use of zero-emissions fuels. “Achieving consensus is essential to realizing the goals of the revised GHG Reduction Strategy, which were unanimously agreed on by all governments in 2023,” Platten emphasized.
As the MEPC 83 approaches, the urgency of finalizing these critical agreements grows, with the shipping industry watching closely for decisive action that will chart the course toward a sustainable future.
