IMO / REGULATORY MATTERS
IMO
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MEPC: CRUCIAL DECISIONS IMO is due to adopt a more ambitious GHG Strategy this year, but this monumental decision is not the only subject affecting our industry. IBIA’s IMO representative Unni Einemo reports on developments
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n July 2023, all eyes will be on the 80th session of the IMO’s Marine Environment Protection Committee (MEPC 80) to adopt a significantly more ambitions greenhouse gas strategy. The IMO’s initial GHG Strategy from 2018 calls for a 50% reduction of all GHG emissions from international shipping by 2050 (compared to 2008), and a reduction in the carbon intensity (CO2 emitted per transport work) of 40% by 2030 and 70% by 2050. During MEPC 79, which took place from 12-16 December 2022, a large share of IMO Member States argued for GHG emissions from shipping to be completely phased out by 2050. There was, however, significant opposition from Member States that are concerned this is not realistic and could have disproportionately negative impacts on developing countries. There were also diverging views on adopting interim GHG reduction targets in the period between 2030 and 2050. There are two main areas of discussion: the level of ambition (i.e. the timing and extent of GHG emission reduction targets), and the “basket of measures” we will need to support the agreed targets. With diverging policy opinions and ideas on the table, the two meetings of the Intersessional Working Group on GHG Emissions (ISWGGHG) scheduled ahead of MEPC 80 in July
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need to thrash out a solution that can get majority support. This will be a tough debate, but failure to adopt a revised IMO GHG strategy at MEPC 80 is not an option anyone wants to contemplate. Regarding the “basket of measures”, we see convergence of views toward combining market-based measures (MBMs) with technical elements in the form of a GHG Fuel Standard (GFS). The most favoured type of MBM seems to be a bunker levy scheme putting a price on carbon emissions, or CO2 equivalents (CO2e) to cover other GHGs such as methane and NOx, potentially combined with a rebate system to reward early movers. For the GFS, there is majority support for this standard to take well to wake (full lifecycle) emissions into account. It means it looks likely we will get a well-to-wake GHG intensity fuel standard, phasing in requirements for ships to use a growing portion of fuels that emit less CO2e than fossil fuels. IBIA supports this direction of travel, but we are concerned about the complexity of documenting well-to-wake emissions. We take part in the Correspondence Group on Marine Fuel Life Cycle GHG Analysis that is tasked with developing lifecycle assessment (LCA) guidelines to support this policy, which are needed in time for MEPC
80. Documentation requirements outlined in the draft go far, far beyond anything we see today and it seems clear that only professional certification bodies will be able to provide the level of detail required from the supply chain to document wellto-tank emissions. For now, the GHG debate is very political, but moving in the right direction, so let’s turn our attention to other decisions and items of importance to the marine fuels sector from MEPC 79. Mediterranean ECA As expected, MEPC 79 adopted amendments to MARPOL Annex VI to designate the Mediterranean Sea, as a whole, as an emission control area (ECA) for sulphur oxides, reducing the sulphur limit in from 0.50% to 0.10% for ships operating within the ECA. The amendments will enter into force on 1 May 2024, while the requirements take effect on 1 May 2025. IBIA played a small part in achieving agreement on the new ECA by commenting to MEPC 78, earlier in the adoption process, that we were confident of sufficient availability of compliant fuels. Ships are already required to use maximum 0.01% sulphur fuel while at berth in the region’s European Union ports, and due to existing ECAs in Northern Europe, North America and the Caribbean, MGO meeting World Bunkering Q1 2023