IMO MEPC 81: The clock is ticking for fossil fuel era in shipping

The International Maritime Organization (IMO), the United Nations (UN) specialized agency for regulating global shipping, has agreed on an illustration of a possible draft outline of an “IMO net-zero framework” for cutting greenhouse gas emissions (GHG) from international shipping.

This marks a step forward in the legal process towards adopting global regulations, referred to as “mid-term GHG reduction measures”, that will help achieve the targets contained in the 2023 IMO Strategy on the Reduction of GHG Emissions from Ships.

At the conclusion of the eighty-first session of the Maritime Environment Protection Committee (MEPC 81), held in London from 18 to 22 March 2024, IMO Secretary-General Arsenio Dominguez said:

“Your Committee is indeed a forum to consider issues of critical relevance for all parts of the marine environment, and this week you made very important progress.”

The next six months are expected to be crucial for country delegates, as they will now work according to the IMO net-zero framework to sort out the details for each measure. These measures must be adopted in 2025 and are to come into effect in 2027.

The draft outline illustration of a possible IMO net-zero framework lists regulations under the International Convention for the Prevention of Pollution from Ships (MARPOL), which will be adopted or amended to allow for a new global fuel standard and a new global pricing mechanism for maritime GHG emissions.

These may include a proposed new Chapter 5 of MARPOL Annex VI containing regulations on the IMO net-zero framework, to include:

• a goal-based marine fuel standard regulating the phased reduction of the marine fuel’s GHG intensity; and
• an economic mechanism(s) to incentivize the transition to net-zero.

The goal-based marine fuel standard and pricing mechanism are mid-term GHG reduction measures specified in the revised IMO Strategy on the Reduction of GHG Emissions from Ships, adopted in July 2023. Several different proposals of what these measures should entail are currently being considered.

As explained, the possible draft outline for the IMO net-zero framework will be used as a starting point to consolidate the different proposals into a possible common structure, to support further discussions with the understanding that this outline would not prejudge any possible future changes to it as deliberations progress.

On the other agenda items, MEPC approved the establishment of two new Emission Control Areas (ECAs), in Canadian Arctic Waters, for nitrogen oxides, sulphur oxides and particulate matter; and in the Norwegian Sea for nitrogen oxide and sulphur oxides. These will be submitted to MEPC 82 for adoption. In addition, MEPC approved new recommendations for the carriage of plastic pellets by sea in freight containers and endorsed, in principle, the draft action plan for the reduction of underwater noise from commercial shipping, with a view to further consideration and final endorsement at MEPC 82.

What is more, the committee endorsed the updated work plan for the development of guidelines for new alternative fuels, including the development of guidelines for hydrogen and ammonia as fuels, low flash-point fuels and mandatory instruments for methyl/ethyl alcohols. Finally, the committee endorsed the list of provisions and instruments for revision and/or development under the Ballast Water Management Convention and approved the interim guidance on the application of the BWM Convention to ships operating in challenging water quality conditions, as well as the Guidance for the temporary storage of treated sewage and/or grey water in ballast water tanks.

An important step to secure a clean future for shipping

The Micronesian Center for Sustainable Transport (MCST) has welcomed the majority support for a universal GHG levy on international shipping, applauding the efforts of the growing Pacific Coalition, 6PAC+ and Belize for their incentives in these crucial negotiations.

However, despite broad agreement on adopting both a GHG Fuel Standard and a GHG pricing mechanism, member states still hold divergent views on the details of the measures. They now face a challenge to agree on key elements in the future measures within a tight timeframe. Given the considerable sums involved in this ‘trillions transition’ that IMO member states have committed to, the stakes are high for all participants, according to the center.

“It is hard to overstate the significance of what might be agreed in Spring 2025. The specifics of these policy measures will determine the ‘shape’ of international shipping, capital flows in the maritime value chains and have major implications for the economies of many countries and global trade,” Tristan Smith, Director of University Maritime Advisory Services, commented.

He also highlighted the interconnected themes of climate action, energy transition, and equitable development as crucial for the shipping sector’s sustainability.

International nonprofit organization Environmental Defense Fund and the International Chamber of Shipping (ICS) also welcomed the outcomes of the 81st meeting of MEPC.

“We are encouraged to see progress toward climate proofing global trade. With growing support for a universal greenhouse gas price, country delegates at the International Maritime Organization must now develop the right policy details to incentivize shipping decarbonization. This, combined with a fuel standard that accounts for the full lifecycle of marine fuels and a way to accelerate investment in cleaner fuels and technologies, will ensure the success of a just and equitable transition for the industry,” Panos Spiliotis, EU Transport Senior Manager, Global Shipping and IMO delegation lead at Environmental Defense Fund, commented.

“We welcome the progress made during these intensive negotiations to achieve net zero emissions from shipping, and the support received from around 60 Member States for a flat rate contribution system per tonne of GHG. The purpose of the proposed system, put forward by the International Chamber of Shipping (ICS), is to reduce the cost gap and incentivise the accelerated uptake of green marine fuels, as well as providing billions of dollars to support the maritime GHG reduction efforts of developing countries,” ICS said.

ICS also noted that the organization was disappointed to see that the proposed resolution clarifying the current status of the Carbon Intensity Indicator (CII) rating system did not receive sufficient support from Member states.

“However, we were heartened to see wide acknowledgement of the need to address the irregularities that have emerged. This heightened awareness is a positive outcome for the ongoing CII review as it is vital we have a workable system to ensure the industry reduces emissions. ICS trusts that all delegations can work towards an improved CII system that incentivises correct behaviours and fully aligns with the objectives of the 2023 IMO GHG Strategy.”