- ICS acknowledges progress on global GHG reduction regulations but stresses the need for urgent action before MEPC 83 in April.
- A universal GHG emissions levy remains unresolved, despite strong industry and government support.
- A broad agreement was reached on an IMO Fund to incentivize first movers and ships using zero or near-zero (ZNZ) fuels.
- Discussions on a GHG fuel standard continue, with ICS advocating a simpler surcharge fee system over complex compliance trading.
Following a week of intensive negotiations at the UN International Maritime Organization (IMO), Guy Platten, Secretary General of the International Chamber of Shipping (ICS), emphasized the need for urgent progress before the Marine Environment Protection Committee (MEPC 83) in April.
“While ICS is broadly satisfied with the progress made on a radical new package of global GHG reduction regulations, including a GHG emissions pricing mechanism, much work urgently remains to be done. But despite divergence on many issues, it is encouraging that negotiations continue in a positive and cooperative spirit.”
With only six weeks remaining before MEPC 83, ICS remains confident that IMO Member States will finalize amendments to the MARPOL Convention, ensuring effective regulations for reducing shipping’s carbon footprint.
Universal GHG Emissions Levy Remains Unresolved
A major sticking point in the discussions is the proposed universal levy on ships’ GHG emissions, widely supported by the shipping industry as the most effective tool to accelerate the transition to net-zero emissions by 2050.
Encouragingly, around three-quarters of IMO States now strongly support the GHG contribution system proposed by a ‘50-plus group’ of governments and ICS. However, opposition from key players like China and Brazil remains a challenge. Addressing these concerns in a practical and straightforward manner is essential to achieving full consensus.
Broad Agreement on Establishing an IMO Fund
A significant breakthrough in the negotiations was the broad agreement among governments to establish an IMO Fund, a concept long advocated by ICS. This fund is expected to generate billions of dollars annually from charges on ships’ GHG emissions.
The IMO Fund aims to financially reward first movers and vessels using zero or near-zero (ZNZ) fuels, such as green methanol, biomethane, green ammonia, and sustainable biofuels. These financial incentives are critical to narrowing the cost gap with conventional marine fuels and accelerating the adoption of new fuels.
Debate Continues Over the GHG Fuel Standard
While discussions on a GHG fuel intensity standard remain ongoing, ICS is pleased that its simpler proposal for GHG surcharge fees is still under consideration. This surcharge would apply to ships unable to comply due to fuel availability constraints.
Many developing countries support this transparent and straightforward approach over a complex system requiring compliance trading with unpredictable pricing. Additionally, there is ongoing debate over whether pooled compliance among different shipping companies will be allowed, given the limited supply of compliant marine fuels.
Call for a Practical Bridge to Consensus
To achieve progress, ICS continues to propose pragmatic and constructive solutions to bridge differences, particularly on economic incentives for adopting ZNZ fuels.
“To ensure progress, ICS will continue to put forward pragmatic and constructive proposals to bridge differences, particularly on the crucial issue of economic incentives for the use of ZNZ fuels,” said Guy Platten.
“Achieving consensus is crucial for delivering the goals of the revised GHG Reduction Strategy, which were unanimously agreed by all governments in 2023.”
With MEPC 83 fast approaching, reaching a balanced and widely accepted agreement is critical to ensuring the successful implementation of effective GHG reduction policies in the global shipping industry.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
