A vitally important set of environment meetings is about to get underway at the headquarters of the International Maritime Organization in London next week.
Global maritime environment policy is set to be revised at the forthcoming Marine Environment Protection Committee set of meetings, held each year in July.
Revised greenhouse gas strategy
Top of the Agenda is the likely adoption of a revised greenhouse gas strategy for the International Maritime Organization. Currently, the goal is for a minimum 50% cut in greenhouse gas emissions by 2050 while also working toward a complete phase-out of climate changing gases by the end of this century.
However, for some time now, there has been work carried out on a revision of that strategy and the MEPC is, this year, expected to adopt the revised strategy.
As the IMO comments: “the revised IMO GHG Strategy will contain concrete greenhouse gas reduction targets for the sector and is expected to outline a basket of technical and economic measures to be developed to set global shipping on an ambitious path towards phasing out greenhouse gas emissions”.
Shipping Australia looks forward to seeing the outcome.
Taxes, credits, fees, levies
Meanwhile, there has been much discussion and excitement about the adoption of potential so-called “economic” measures (involving payments of money in some form).
One proposal (by Norway) is a cap and trade system whereby some kind of credit would be auctioned. This would affect, if implemented on the 2019 fleet, about 63,500 ships at or above 400 Gross Tons. With some understatement, the IMO notes that such a scheme would generate “considerable revenues” in the range of $130 to $140 billion per year from 2030. Norway wants to use the funds to support climate action in developing countries and to speed-up the introduction of sustainable low- and zero-emissions fuels and technologies, in particular, green fuels and infrastructure capacity.
Japan has proposed a “feebate” mechanism to help phase out greenhouse gas emissions by 2050. Under this proposal, a mandatory fund, managed by the IMO, would be set up and ships would have to make mandatory financial contributions. The fund would then disburse rewards to stimulate demand for zero-emission fuels and technologies, to support projects in developing countries, to develop infrastructure for green fuel, and for research and development. It is a goal-based measure and would accept any approach including onboard carbon capture and storage. This approach is attractive for a number of reasons as, like the Norwegian proposal, it is a market-based measure and it would well-align with existing carbon intensity and ship index rules set (along with the associated data collection and processing systems) set-up by the IMO.
Another measure attracting interest is a proposal from the Pacific Island countries, led by the Marshall Islands and the Solomon Islands, to impose a global greenhouse gas levy at the point of sale on bunker fuel. Another attractive measure owing to its relative simplicity, it’s ability to send a clear, strong, signal, and the likely impacts it would have on demand. The revenues could then be spend on research, development, and maritime projects. It is considered that this levy would be consistent with other international treaties such as the Paris Agreement.
There must be one set of rules
Shipping Australia comments that the global shipping could support an international tax or levy – the industry has itself previously proposed taxes should be levied on shipping – provided that it is authorised by the IMO and it works on a global basis.
The shipping industry shipping is absolutely opposed to each separate country or regions making their own rules. There are about 190 countries in the world and ships simply cannot carry international trade if they have to comply with many different sets of contradictory rules. If ships cannot operate then trade cannot continue. Here, in Australia, we are utterly dependent on seaborne trade – about 99.92% of everything that comes into, or leaves, this country is transported by ship. It is in Australia’s national interest that there is one set of global laws governing shipping.
We are also of the view that any funds raised must be used to prevent and alleviate climate change e.g. technology-research; that any climate-related taxes or levies should have an end-point and not become an endless tax grab; and that any levies or taxes should be clear and separate from any other fees.
Key IMO environmental milestones
1954 – Signing of the International Convention for the Prevention of Pollution of the Sea by Oil, London
1973 – Signing of the International Convention for the Prevention of Pollution from Ships 1973 “MARPOL”
1983 – Entry into force of MARPOL (subsequently amended and updated 1978, 83, 87, 88, 92, 2003, 05)
2005 – MARPOL Annex VI enters into force – sets global rules on ship source air pollution
2020 – “IMO 2020” global sulphur-in-fuel limits dropped to 0.5%; some areas have limits of 0.1%
2011 – adoption of mandatory energy efficiency regulations Under MARPOL Annex VI (air pollution from ships):
- Energy Efficient Design Index
- Ship Energy Efficiency Management Plan
- Both entered into force globally 2013
- The EEDI and SEEMP were the first mandatory global GHG reduction regimes for an entire global transport sector!
2014 – Third IMO GHG Study 2014 published
2015 – Ship Design Index (EEDI) – phase 1 – 10% cut in carbon intensity of new ships
2018 – IMO adopts Initial Strategy on cutting GHG emissions from ships:
- Aim: to cut C02 emissions
- by 40% by 2030 compared to 2008
- by 50% by 2030, but also pursuing 70% cut by 2050
- by 100% by the end of this century
2020 – EEDI – phase 2 – cut of 20% of C02 from new ships
2021 – IMO adopts two major greenhouse gas measures
- the Existing Ship Design Index
- ship emissions must be lower than the EEXI baseline
- applies to ships greater than 400 gross tons* on international voyages
- the Carbon Intensity Indicator (CII)
- this sets a baseline of emissions from ships based on 2019 data
- ships are initially required to emit 5% less than the baseline
- CII baseline then falls 2% a year until 2026
2022 – EEDI 3 – up to 50% cuts in carbon intensity for new boxships
2023 – CCI enters into force; Revision of IMO GHG Strategy – July MEPC 80
2025 – EEDI 3 (again) up to 30% reduction of C02 for other ships
* NOTE: “gt” or “gross tons” or “gross tonnage” is NOT a measure of weight; it is a measure of VOLUME. It measures all the inclosed internal space inside a ship. The word “ton” in this context has its origin in the old barrels of wine that were called “tuns”. Gross tonnage is defined by the International Convention on Tonnage Measurement of Ships.
