IMO Progresses Decarbonisation Efforts For Shipping Industry

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  • The recent International Maritime Organization (IMO) Marine Environmental Protection Committee meeting, MEPC81, has provided renewed momentum for the shipping industry’s decarbonisation efforts.
  • While the meeting did not enact concrete measures, it assessed member states’ commitment to the Revised GHG Strategy adopted in July 2023, indicating a shift toward a greener future, according to commercial shipping advisory UMAS.

New Chapter in MARPOL

MEPC81 introduced a new chapter in Annex VI of MARPOL, which focuses on marine pollution regulations. This draft chapter, titled “Regulations on the IMO Net-Zero Framework,” lays the foundation for future greenhouse gas (GHG) policy options such as a goal-based fuel standard, emissions trading schemes, and a potential GHG levy. The unanimous support from member states highlights a collaborative spirit for future negotiations.

Balancing Environmental and Social Progress

Discussions also underscored the importance of transitioning to cleaner fuels while ensuring equitable approaches. The debate around a GHG levy, which encourages lower emissions and generates revenue for technological advancement and a fair transition for developing nations, gained traction.

Upcoming Policies and Timelines

The IMO aims to finalize policy measures by April 2025, with adoption by the end of the year and regulations taking effect in 2027. MEPC81 tackled details to meet this timeline, including creating an expert workshop and a working group to refine policies. Although complexities and uncertainties remain, the meeting suggested that these risks are decreasing.

Managing Risks and Opportunities

Investors face risks in the shipping industry due to the uncertainties of zero-emission fuels and future policies. However, delaying decisions could mean missing out on opportunities to manage risks and capture future market share in zero-emission shipping.

Embracing Innovation and Collaboration

The success of IMO’s strategy depends on ongoing international collaboration and technological advancements. Research and development in zero-emission fuels and propulsion technologies are crucial. Discussions on alternative fuels at MEPC81 suggest future innovation. Open communication between policymakers, industry leaders, and investors is essential for a smooth transition towards a sustainable shipping future.

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Source: Baltic Exchange