MEPC78 fails to agree on revised GHG targets

The IMO’s current strategy calls for a reduction in CO2 emissions per transport work of at least 40% by 2030 compared to 2008 levels and a reduction in total annual GHG emissions of at least 50% by 2050 compared to 2008 levels. The Intergovernmental Panel on Climate Change (IPCC), along with leading voices within the shipping industry, have indicated that this is not ambitious enough.

At MEPC78, some nations called for full decarbonisation by 2050 but others wanted further work done on the feasibility of this goal before making a decision – which is now expected at MEPC 80 in July 2023.

The World Shipping Council (WSC) issued a statement saying that the step change to alternative fuels will require much more of all maritime actors, and the role of IMO member states in progressing the necessary regulatory pathways and public-private partnerships cannot be overstated. It is promising therefore that MEPC78 saw a constructive discussion on the revision of the IMO GHG strategy, with a clear majority of member states in support of a 2050 zero GHG target.

“Transitioning global shipping from a carbon dependent industry into one that operates without greenhouse gas emissions is a massive task. We are encouraged by member state contributions that recognize the need to focus on key actions, and urge all member states to accelerate and expand this crucial work. Container and vehicle carriers are already investing in the development of zero GHG technologies and are committed to enabling the industry’s transition to zero. Governments need to take decisive action now to provide clear regulatory structures and market signals that drive investment and support ambitious front runners,” said John Butler, President & CEO of WSC.

In closing remarks at MEPC78, IMO Secretary-General Kitack Lim said he was encouraged by the commitment to set more ambitious GHG emission goals. “Continued constructive dialogue and achievements are a true testament to the spirit of cooperation that prevails here in the Committee. As you all know the world is watching and therefore, we need to continue to deliver through concrete ambitious outcomes in the years ahead.”

Dr Aly Shaw, Policy Lead at commercial advisory service provider UMAS, was also positive: “IMO’s current heading seems encouraging. It was reassuring to see the appetite for a fair and equitable transition has been carried forward from the last meeting into MEPC78. Looking forward, we may assume that we are on a path for a stronger ambition from IMO in the Revised Strategy and a continued focus on equity and fairness throughout discussions on future policy measures, including emissions pricing.”

Research funding proposal “dead”

Discussions regarding the establishment of an R&D Fund and International Maritime Research and Development Board (IMRB) continued, but Lloyd’s Register noted that there were concerns that the proposals did not adequately address the principle of common but differentiated responsibility. Doubts were raised over how money directed at research could achieve an equitable decarbonisation transition.

Guy Platten, International Chamber of Shipping (ICS) Secretary General, commented: “By refusing to take forward the shipping industry’s proposed research and development fund, the IMO has wasted its opportunity to kick start a rapid transition to zero-carbon technologies which will be vital if we are to decarbonise completely by 2050. Despite the support of many IMO States, we have been frustrated by short-sighted political manoeuvring which has led to the proposal in effect being killed. The signal this sends means that the financial risk associated with green investment will remain high, slowing down efforts to switch to zero-carbon fuels as soon as possible.

“Some claimed that the fund was a market-based measure and did not go far enough, deliberately misinterpreting our intention. The fund was never presented as a carbon pricing measure, which, although being an additional measure which we also fully support, is politically far more complex and will take many more years to develop. If governments had shown the political will, the separate R&D fund could have been up and running next year, raising billions of dollars from industry at no cost to governments.

“Despite the lack of government leadership at the IMO, the shipping industry remains committed to finding ways of achieving net zero carbon emissions by 2050. Funding for R&D will be top of the agenda at the Shaping the Future of Shipping Summit, to be hosted by ICS in London on 21 June. We will bring together leading CEOs from across our global industry to find ways to practically decarbonise shipping.”

Simon Bennett, Deputy Secretary General of ICS, added: “In addition to providing half a billion dollars per year to support global R&D programmes, the fund would have provided US$50 million per year to support maritime greenhouse gas reduction projects in developing countries – a 10-fold increase to the current IMO technical cooperation budget. Sadly, it seems this opportunity to provide immediate help to the likes of Small Island Developing States has also now been lost.

“On the positive side, the possibility remains for the IMO to make use of the Fund’s proposed regulatory architecture to underpin a future global carbon levy on shipping’s CO2 emissions, to close the price gap with zero-carbon fuels when they become available and provide significant funds to help expedite the transition to net zero by 2050. “If the contribution system which we have developed can speed up implementation of a global carbon levy for shipping, we may yet be able to look back on this setback at the IMO as a significant moment of success.”

Agreement on short-term measures

The committee approved guidelines for the package of short-term measures which are focused on reducing GHG emissions from the existing fleet. DNV reports that MEPC 78 finalized guidelines related to the Energy Efficiency eXisting ship Index (EEXI), Carbon Intensity Indicator (CII) and Ship Energy Efficiency Management Plan (SEEMP) so these measures are now ready for implementation next year.

The EEXI technical file needs to be approved before the first annual, intermediate or renewal IAPP survey or the initial IEE survey on or after 1 January 2023. The SEEMP Part III needs to be approved and on board by 1 January 2023. The first reporting of the CII based on 2023 data is due no later than 31 March 2024.

SEEMP Part III will require affected vessels to submit a three-year implementation plan describing how they will achieve the required Carbon Intensity Indicator (CII). The CII will rate MARPOL ship types above 5,000 GT using a scale from A to E on how efficiently they transport goods or passengers regarding the CO2 they emit. For vessels obtaining an inferior rating, the SEEMP III report must be updated with a corrective action plan which must be verified before a Statement of Compliance can be issued.

Changes approved at MEPC78 include:

EEXI guidelines: the option for in-service performance measurements was included.

CII calculation guidelines (G1): The capacity parameter for ro-ro cargo ships was changed to gross tons.

CII reference lines guidelines (G2): Reference lines for ro-ro cargo ships and ro-ro cargo (vehicle) ships were updated. The reference line for ro-ro passenger ships was split in two, with a separate line for high-speed craft (HSC) and an updated line for ro-ro passenger ships excluding HSC.

CII rating guidelines (G4): Updates were made to the rating thresholds for the ship types with updated reference lines.

Interim CII correction factor and voyage adjustment guidelines (G5): A new guideline was agreed that includes correction factors and voyage adjustments for various ship types and circumstances. After extensive discussion, corrections for adverse weather and extensive port and waiting time were not included and will need to be raised at the review in 2025.

SEEMP guidelines: The guidelines were updated to include guidance on developing and verifying the SEEMP Part III (ship operational carbon intensity plan).

Port State Control guidelines: MEPC 78 requested the sub-committee on Implementation of IMO Instruments (III 8) (July 2022) consider if failing to implement the implementation plan in SEEMP Part III is a detainable deficiency.

ABS reports that the Committee approved MEPC circular MEPC.1/Circ.902 which provides guidance on in-service performance measurements for EEXI calculations. For cases where the speed-power curve is not available or the sea trial report does not contain the Energy Efficiency Design Index (EEDI) or design load draught condition, the ship speed Vref can be obtained from the in-service performance measurement, in accordance with paragraph 2.2.3.5 of the EEXI Calculation Guidelines (MEPC.350(78)).

The impact of onboard carbon capture systems on EEXI calculations was discussed, but discussion is expected to continue at MEPC 79.