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MEPC 81 sees possible outline for maritime ‘net-zero framework’

The IMO has said that at last week’s MEPC 81 meeting in London it had agreed on an illustration of a possible draft outline of an IMO net-zero framework.

This is a (slow and small) step forward in the legal process towards adopting global regulations. They are referred to as “mid-term GHG reduction measures”, contributing towards but not fully solving the targets contained in the 2023 IMO Strategy on the Reduction of GHG Emissions from Ships.

MEPC 81 ran from March 18th to March 22nd. IMO Secretary-General Arsenio Dominguez said that this week it had made “very important progress”.

The draft outline lists regulations under the International Convention for the Prevention of Pollution from Ships (MARPOL). These regulations would 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. These would 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 were currently being considered.

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.

MEPC agreed on the following next steps, ahead of its next meeting (MEPC 82), scheduled for September 30th to October 4th 2024:

  • Comprehensive impact assessment on the impact of the proposed mid-term measures on Member States to be finalized and submitted to MEPC 82;
  • A two-day expert workshop (Fifth GHG Expert Workshop – GHG-EW 5) to be held to discuss the preliminary findings of the comprehensive impact assessment, covering all aspects, including the modelling of revenue disbursement. The outcome will be reported to MEPC 82;

The 17th Intersessional Working Group on Greenhouse Gas Emissions (ISWG-GHG 17) will meet to consider the outcomes of the comprehensive impact assessment, the GHG-EW5, and other submitted documents for further discussions around the development of mid-term measures, and report to MEPC 82. ISWG-GHG 17 will develop draft terms of reference for a Fifth IMO GHG Study; Establishment of a GESAMP Working Group on the Life Cycle GHG Intensity of Marine Fuels.

(GESAMP is the Joint Group of Experts on the Scientific Aspects of Marine Environmental Protection)

The GESAMP-LCA WG will be tasked to provide best possible scientific and technical assessment of issues related to the implementation of the LCA Guidelines.

The LCA guidelines allow for the calculation of GHG emissions over the full production cycle and end-use of marine fuels, known as ‘well-to-wake’;

  • Two correspondence groups have been established which will report to MEPC 83: The first group will develop a work plan on the development of a regulatory framework for the use of onboard carbon capture systems and to look into Tank-to Wake methane and nitrous oxide emissions. The second group will look into social and economic sustainability themes and aspects of marine fuels for possible inclusion in the LCA Guidelines.
  • MEPC also adopted revised Guidelines on life cycle GHG intensity of marine fuels (LCA Guidelines). The updated guidelines include revised calculations for default emission factors; It updated appendix 4 on template for well-to-tank default emission factor submission, and added a new appendix 5 template for Tank-to-Wake (TtW) emission factors.

The International Chamber of Shipping (ICS) said that “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 ICS, is to reduce the cost gap and incentivize the accelerated uptake of green marine fuels, “as well as providing billions of dollars to support the maritime GHG reduction efforts of developing countries”, said the ICS.

“ICS will seek to address these concerns with all governments before the next round of IMO negotiations in September, to help ensure that the necessary regulatory framework can be adopted next year, for global implementation by 2027.”

However, the ICS noted that “as a co-sponsor, ICS 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.

The Clean Shipping Coalition (CSC) welcomed the growing support for a greenhouse gas (GHG) emissions levy, but warned that IMO member states must also maintain focus on other key issues such as the global fuel standard (GFS) and the improvement of how energy is used in ships via the carbon intensity indicator (CII).

“MEPC81 reaffirmed to us that countries clearly back a GHG emissions levy rather than weaker alternatives, which sends a strong signal for further developing the policy”, said CSC President John Maggs. “However the IMO must not lose sight of the other, equally important measures, namely agreeing on a clean energy standard (GFS) and improving the energy efficiency of ships through the Carbon Intensity Indicator (CII).

“On the latter in particular, I was delighted to see IMO member states this week firmly reject the shipping industry’s attempt to downgrade the CII rules. This is a good omen not just for the CII’s big moment at MEPC 82 this October, but the whole discussion on measures to deliver the 2023 GHG Strategy emissions reduction goals.”

Sandra Chiri, Shipping Manager, Ocean Conservancy, said that “the March talks at the IMO gave us hope that a clear majority of countries – the Caribbean, the Pacific, Africa, but also the EU and Canada – understand the huge opportunity of pricing shipping emissions for the industry’s clean transition and for making sure this transition benefits all developing countries. It’s regrettable that a small but persistent minority strives to water down this vital climate measure, with a proposal of their own that we know is not ambitious enough”.