Global News Revised IMO emissions targets set clear timeline: shipping groups

The revised greenhouse gas emissions strategy agreed in London Friday by member states of the International Maritime Organization (IMO) gives the shipping industry a clear timeline for a global fuel standard and a market-based measure to be rolled out in 2027, according to carrier groups.

But it was widely acknowledged that the 2023 IMO Strategy on Reduction of GHG Emissions from Ships was merely the starting point of a long and difficult journey to decarbonize the shipping industry.

Even IMO Secretary-General Kitack Lim — who called the adoption of the revised strategy “a monumental development for the IMO” — acknowledged that this was only the beginning.

“It is not the end goal; it is in many ways a starting point for the work that needs to intensify even more over the years and decades ahead of us,” he said in a statement after the deal was reached.

Two weeks of often contentious negotiations at IMO headquarters by the Marine Environment Protection Committee (MEPC 80) ended Friday with an agreement to revise shipping’s global emissions target from “at least” 50% based on 2008 data to “by or around” net-zero by 2050.

Member states also set a timeline for the adoption of mid-term measures, such as a global fuel standard and a greenhouse gas (GHG) pricing mechanism such as a carbon levy, to be designed in the next two years and implemented in 2027. Common industry vision The agreement provides the shipping industry with a clear and common vision of what is required, believes John Butler, president and CEO of the World Shipping Council (WSC).

“The next two years will be critical — for 2050 targets to be achievable IMO member nations must develop and agree on a lifecycle-based global fuel standard and economic measure by 2025, so they can be implemented by 2027,” Butler said in a statement Friday.

With carriers already investing in renewable fuel-ready ships, Butler said the IMO’s revised strategy broadcast a strong global signal for investment to the entire maritime sector.

“We are counting on the IMO member nations to press on with the important work of developing and adopting a robust regulatory framework that will make these fuels available and competitive,” he added.

The price differential between fossil fuel and sustainable alternatives is far too wide to make investment in green fuel production and infrastructure attractive. Over the past few years, there has been strong support from shipowners for an economic measure to take the form of a carbon levy to build up a multi-billion-dollar global fund aimed at reducing the cost differential.

Maersk has stated that a carbon tax of at least $150 per ton of CO2 emitted is needed to equalize the costs and stimulate demand, while Seaspan believes a carbon emissions penalty or a tax of $200 to $300 per ton of CO2 would be more realistic.

Shipping association BIMCO also welcomed the clarity provided by the IMO agreement.

“BIMCO is grateful to the IMO member states for setting out in clear terms the pathway the shipping industry needs to follow in order to transition each and every ship in the world fleet to a net-zero GHG emission future,” BIMCO President Nikolaus Schües said in a statement. ‘Groundbreaking’ agreement Schües called “groundbreaking” the IMO ruling that by 2040 the world fleet must have reduced its total GHG emissions by more than 70% compared with 2008.

“Newer ships already on the water and those on order will exist well beyond 2040 and the emissions reduction outlined in the strategy will apply to these ships,” he said.

“The profound change in the way ships must be built, operated and fueled will impact every shipowner on the planet,” Schües added. “Investment decisions need to be reassessed, designs need change and business models will be forever impacted.”

Still, IMO’s revised strategy did not garner universal support. Fred Krupp, president of the US-based nonprofit advocacy group Environmental Defense Fund, said it does not go far enough.

“Member states at the IMO showed they are willing to steer the shipping sector towards a clean future, but the 2023 strategy is not in line with the 1.5C temperature goal of the Paris Agreement,” Krupp said in a statement.

The EDF statement said increasing demand to move goods could see pollution from ships increase by nearly 50% in the next two decades and continue to rise unless stronger action was taken.

And Krupp said the intermediate checkpoints at 2030 and 2040 were not strong enough to deliver the necessary emissions reductions, adding that the language around the deadline for phasing out emissions of “at or around 2050” was ambiguous.

“The next two years will be crucial for the [IMO] to develop robust mechanisms to eliminate emissions from ships in a manner that protects the environment and communities, and that delivers rapid and effective decarbonization beyond the ambition agreed upon today,” he said.