SEA-LNG hits out at proposed differential treatment of LNG

The lobbying group said despite the limited time remaining before MEPC83, it remains confident that the current negotiations will continue to progress in a positive and cooperative spirit that will ultimately lead to agreement on a fit-for-purpose, robust, and enforceable legislative framework that will accelerate the maritime energy transition.

It went on to state the current IMO strategy is agnostic with respect to fuels and technologies that may be adopted by the industry to reduce GHG emissions from today and achieve net-zero greenhouse gas emissions by 2050 — a position that SEA-LNG has consistently supported. It is precisely this goal-based and technology neutral approach that is needed for the emergence of a multi-pathway future for shipping. Deviating from these principles will limit the sector’s effective compliance options, slowing progress on reducing GHG emissions, and increasing the costs of transition.

However, SEA LNG added it was disappointed to read in the document ‘Safeguarding a Multi-Pathway Future for Shipping’ that a limited number of stakeholders have sought to undermine the progress already made at the IMO by proposing a differential treatment of LNG and other low-emission options within the proposed GHG Fuel Standard mechanism.

More specifically the group stated the view expressed in the document would:

“Narrow fuel compliance options: By introducing a GHG threshold, the proposal risks limiting the types of fuels and technologies eligible for compliance under the GFI Standard and jeopardises the ability of the industry to meet the IMO GHG strategy targets. In addition, the proposal does not consider the use of liquefied biomethane or e-methane as a net-zero solution.

“Create regulatory misalignment: The currently agreed-upon annual GHG fuel intensity calculation formula ensures alignment with the objectives of the draft Net-Zero Framework and IMO strategy in promoting early and cost-efficient emission reduction. It is also consistent with FuelEU Maritime calculations.

Stifle technological innovation: Emerging technologies, such as carbon capture, are critical for achieving substantial emissions reductions in the long term, but their potential will not be fully realised in the early phases of the decarbonisation journey if the investment is not made. It is important, therefore, not to rule out these technologies in any mid-term economic measure that may incentivise their uptake.

Increase compliance costs: The global scarcity of fuels that meet the proposed threshold will likely lead to higher compliance costs as it will force shipping companies to pay more to maintain their operations while contributing to pollution. This, in turn, will slow down the energy transition of maritime transport. Threshold considerations should only be part of the mid-term measures reward mechanism.

Promote high-emission fuels: The view expressed implicitly incentivises the use of grey methanol and grey ammonia, which have higher WTW GHG emissions compared to traditional oil-based fossil fuels, undermining efforts to transition to cleaner alternatives that genuinely reduce emissions.”

SEA-LNG COO Steve Esau (pictured) said: “One tonne of emissions reduction is one tonne of emissions reduction. The fuel sources used to achieve that reduction should be irrelevant in the eyes of the IMO’s GHG Fuel Standard mechanism. At this critical point, the IMO should not be drawn into discussions that would distort fuel markets. Ship operators should be able to choose their own decarbonisation pathways without undue hindrance from the IMO.”

“Recent moves by a limited number of stakeholders to undermine the progress made at the IMO on GHG fuel intensity would weaken the principles of technological neutrality and create a global regulatory framework which is inconsistent with FuelEU Maritime. It is disappointing to see certain European stakeholders seeking to use the IMO to challenge the rules, regulations, and principles already in place at the European level.”