MEPC 70 preview: Industry pressure builds

Next week’s meeting was always going to be a busy one, as the scheduling of an extraordinary second MEPC meeting this year (the first was in April) indicates. Several discussions originally raised in April have been held over until the November sitting to ensure there is time to discuss them fully.

In this article we highlight some of the major topics for discussion next week, along with perspectives from within the industry.

CO2 reduction measures

At MEPC 69 agreement was achieved on the need for a mandatory data collection system on fuel consumption, seen by IMO member states as a precursor to any decision on further moves to cut industry CO2 emissions. Next week the MEPC will aim to formally establish that data collection system. But submissions to the IMO from member states, affiliate organisations and companies are seeking further action.

Three submissions from MEPC 69 on the issue of CO2 reduction targets were held over for more discussion next week: a suggestion from the International Chamber of Shipping (ICS) that IMO should develop an ‘intended IMO determined contribution’ on greenhouse gasses emission reduction for the industry; a proposal led by Belgium that IMO should begin work to define a ‘fair share’ for the industry, identifying what emissions reduction the industry should commit to in line with global efforts; and a submission led by the World Shipping Council (WCS) outlining several principles by which the IMO should consider further CO2 reduction targets or measures.

A new joint submission from ICS, WCS, BIMCO, Intertanko and Intercargo references the earlier proposals and urges IMO to develop a roadmap to determine shipping’s fair share of emissions reductions. It acknowledges that the IMO will need to prioritise the system collecting data, on which any further reduction measures should be based, but argues that “this need not prevent preliminary consideration of what IMO’s fair share contribution might possibly entail in advance of the data becoming available”.

Meanwhile a broad coalition of 51 companies – comprising shipowners, logistics providers, marine technology providers and non-governmental organisations – are pressing IMO member states to set a ‘clear, ambitious long-term objective’ for shipping emissions reduction. A letter sent to the 171 IMO member state delegations – signed by companies including Maersk, Cargill, Hamburg Bulk Carriers, Scnadlines and J Lauritzen – notes that IMO has repeatedly failed to set a target for cutting emissions.

The signatories noted that while the IMO requires all vessels to prepare and hold a Ship Energy Efficiency Plan (SEEMP) document, there are no targets or requirements associated with that document. The EEDI meanwhile will take a generation to affect the global fleet, and ‘its stringency and effectiveness are in question’.

John Kornerup Bang, chief advisor climate change, Maersk, commented: “We will continue working to reduce CO2 emissions in the years to come, striving to reach our 60% relative reduction by 2020. But we are reaching the point where it will be more and more challenging to drive significant CO2 reductions on our own. Global regulation is therefore needed, more than ever, and it is crucial that IMO moves beyond data collection and establishes an ambitious and accelerated process to determine shipping’s ‘fair share’ of emissions, which will allow for subsequent definitions of long term targets and market-based mechanisms.”

Stefan Bülow, managing director, HBC Hamburg Bulk Carriers, added: “Over our years of commitment to protecting the environment and in developing one of the most fuel-efficient fleets in the market, we have seen first-hand the scale of innovation and possibility for emissions reduction within the international shipping industry. We joined this letter to support a mature and positive attitude to the ability of the industry to reduce its emissions and create sustainability. This presents a significant opportunity to our community and with IMO’s direction we can act on a level playing field and embrace it together.”

Global sulphur cap

At MEPC 69 the committee committed to taking a decision on the implementation date for a global 0.5% fuel sulphur cap at MEPC 70. The committee will consider a long-awaited report into fuel availability by consultant CE Delft – anticipated to conclude that there are no significant supply concerns for a 2020 introduction – before coming to that decision.

Other parties have a different perspective. BIMCO, the world’s largest ship owner and operator association, has commissioned a ‘supplementary study’ which argues for a phased introduction of the sulphur cap. BIMCO argues that the IMO study is flawed and that it would be “irresponsible for IMO to make the decision to go for 2020 at MEPC 70 in October”, according to deputy secretary general Lars Robert Pedersen.

BIMCO argues that a significant amount of the fuel oil that the IMO study concludes will be available for marine use is unsafe to store and use onboard ships, and will therefore be unavailable for shipping. It also questions how an assessed shortage of sulphur removal capacity in refineries will be resolved so that capacity would be in place by 2020. Further, the study fails to model the disruption that an overnight introduction of the global cap would cause.

Pedersen added: “This is not about the cost of low sulphur fuel for ships – that has long been known. We know that the shipping industry will buy the fuel they need. But if it is in short supply, the cost will rise not just for shipping but for all users of the fuel. This will price those in poorer economies out of the market.”

Ballast water management

With entry into force of the IMO’s Ballast Water Management (BWM) Convention finally triggered and set for 8 September next year, this MEPC meeting will be pivotal in wrapping up some of the many outstanding issues regarding BWM system testing and certification.

The review of G8 guidelines is examining, among other things, the possibility of more stringent type approval testing to ensure that approved systems are capable of operating in all conditions, including different water salinities, temperatures and flow rates. Changes to type approval certification and how to deal with installed systems type approved under earlier guidelines are also being discussed.

BIMCO’s Pedersen notes: ““BIMCO is concerned that systems approved to the present IMO standards are not robust enough to ensure that systems onboard real ships perform to the regulatory requirements to treat ballast water. We therefore call upon IMO to expedite the revision of their G8 guidelines.”

Significant progress on these issues is expected at MEPC 70.

A submission from the Liberian Registry to MEPC 70 will seek to provide additional time for some ships to install BWM systems. As compliance dates are linked to renewals of a ship’s International Oil Pollution Prevention (IOPP) certificate, Liberia has proposed that shipowners may decide to renew a ship’s IOPP certificate earlier than scheduled in order to have an additional 4-5 years to install equipment. The proposal, says Liberia, would ensure that enough systems and sufficient dockyard space are available.

David Pascoe, senior vice-president, operations & standards at LISCR (the US-based manager of the Liberian Registry), said: “The revised BWMS approval guidelines are expected to be roughly aligned with the robust typ approval regime of the US, thus establishing a rigorous global standard for BWMS type approval. But there are no BWM systems currently approved by the US, and it could take several years for equipment approved under the new IMO guidelines to be readily available for installation. In the meantime, tens of thousands of ships may be required to install existing systems that may not fully comply with the convention standards.

“It is by no means certain that adequate new systems will be commercially available in sufficient quantities within this period. Additionally, based on a study by Liberia, the dockyard capacity to fit systems on board ships will fall well short of peak demand, expected to occur in 2020-2021.”

Other expected highlights

There will be plenty more going on at MEPC next week. Among the key issues are:

• Discussion towards the introduction of the next batch of NOx emission control areas, in the North Sea and the Baltic Sea;
• Debate over whether the EEDI timeframe and CO2 reduction levels for phase two, from 2020, are in need of updating;
• Approval of a draft unified interpretations to the NOx Technical Code related to the approval of selective catalytic reduction systems as meeting NOx standards.

The Motorship will be in attendance at MEPC 70 and, although it is prevented by IMO byelaws from reporting during discussions, will present a full report after the meeting concludes.