MEPC 82 Advances Shipping Toward Net Zero

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  • The IMO’s Marine Environment Protection Committee (MEPC) 82 meeting marked progress toward establishing regulations to achieve the IMO’s ambitious 2050 decarbonization goal, including interim targets for 2030 and 2040.
  • Key components under development are Greenhouse Gas Intensity (GFI) regulations and a potential carbon pricing model, aiming to be formalized by 2027.
  • Differing views among member states on “well-to-wake” vs. “tank-to-wake” emission calculations and compliance flexibility measures, such as banking and pooling, underscore ongoing negotiations.
  • Strongly supported by some states and opposed by others, a universal carbon levy remains a contentious issue that requires diplomatic resolution ahead of MEPC 83 in 2025.

According to the Baltic Exchange, the IMO’s Marine Environment Protection Committee 82 (MEPC 82) meeting represented another crucial but cautious step in the decarbonization of the shipping industry. Building on the ambitious goals set at MEPC 80 in 2023, which committed to full decarbonization by 2050, MEPC 82 focused on establishing the necessary regulatory framework. However, significant political and technical challenges remain, as member states negotiate key aspects of the strategy, including carbon pricing and emissions measurement.

Advancements in Decarbonization Strategy and Regulation

The 2023 MEPC 80 meeting established a robust commitment to decarbonize by 2050, with targets for 20% emissions reduction by 2030 and 70% by 2040. Central to this strategy is a “well-to-wake” approach, addressing all emissions from fuel production to usage. MEPC 82 progressed in building a regulatory foundation for these goals, with plans for the measures to take effect in 2027.

Proposed regulations include two main components: a Greenhouse Gas Intensity (GFI) regulation limiting fuel emissions on ships and a potential carbon pricing mechanism to support low-carbon fuel adoption. MEPC 82 advanced these regulations, setting the stage for their review in 2025 and implementation by 2028.

Political Tensions in Emissions Measurement Approaches

A major divide exists among member states on calculating greenhouse gas emissions. The EU advocates a “well-to-wake” approach, addressing emissions from production through fuel usage, while China and others favor a “tank-to-wake” model that considers only onboard emissions. Both approaches meet IMO’s greenhouse gas intensity goals, yet the decision impacts policy implementation across regions. MEPC 82 highlighted this ongoing debate, with stakeholders working toward a compromise.

Flexibility Measures for Compliance

Member states differ on the inclusion of compliance measures like banking, borrowing, and pooling, which would ease the transition to low-carbon fuels. The EU and China support these options, while Pacific and Caribbean island nations oppose them, citing concerns about alternative fuel accessibility. Despite these differences, MEPC 82 signaled potential common ground, as states negotiate flexibility measures that uphold the decarbonization targets.

Carbon Pricing: A Point of Contention

Carbon pricing, seen by many as a means to incentivize low-carbon fuel adoption, remains one of the most contentious topics. Supporters, including Pacific and Caribbean islands, propose a levy of $150 per tonne CO₂ to fund decarbonization and equalize fuel costs. The EU also supports pricing as a pathway to sustainable fuels. However, China and other nations oppose a universal levy, citing potential harm to trade and disproportionate effects on developing economies.

While levy supporters hold a majority, IMO’s consensus-based process necessitates a diplomatic solution, especially given the significant influence of opponents. As MEPC approaches its 2025 meeting, states are expected to work toward a compromise that respects competing interests.

Outlook: MEPC 83 and the Road Ahead

Looking ahead, MEPC 83 in 2025 will be a pivotal moment for finalizing IMO’s decarbonization strategy. Despite political obstacles, industry experts, including Erik Nyhus of DNV, remain optimistic that a consensus will be reached on these essential measures. With sustained diplomatic effort, the IMO is poised to achieve a unified regulatory framework supporting a sustainable future in shipping.

 

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Source: Baltic Exchange