Research fund out, lifecycle analysis in at MEPC 78

The usual mix of progress and stalled initiatives occupied the IMO’s Marine Environment Protection Committee convened earlier this month, setting the context for frantic discussions ahead of next year’s key meeting.

The monumental task of driving global consensus on reducing shipping emissions crawled forward ever so slightly at MEPC 78 this month. That may have made it frustrating for observers, but the meeting was successful in laying out a clear agenda for what needs to be achieved by MEPC 80 – the deadline for IMO to review and hopefully upgrade its 2050 and intermediate targets.

Given the time constraints of the virtual meetings, several proposals were deferred until the next MEPC, to be held in December. MEPC 78 focused on three key discussions around greenhouse gas emissions:

Proposals related to revision of the Initial IMO GHG Strategy, which is scheduled to be adopted at next year’s June MEPC meeting;
The outcomes of the intersessional working group meetings on GHG;
Proposals for mid-term GHG reduction measures and the International Maritime Research and Development Board;

Revising the IMO GHG strategy

The discussions at MEPC focused on revising the level of ambition in GHG emissions reductions while ensuring an equitable transition that does not unfairly burden developing states and small island countries.

While some countries argued for a higher 2050 target of reducing GHG emissions from shipping by 100%, others argued against, saying that IMO had the responsibility of taking a realistic and pragmatic approach. Other phased targets were considered, ranging from upgrading the 2030 ambition to introducing five-year targets.

With no chance of consensus in the current meeting, the formation of three new intersessional working group meetings was agreed; one to be held before MEPC 79 in December and a further two before MEPC 80 in mid-2023.

Outcomes of intersessional working groups

The intersessional groups before MEPC 78 had considered draft guidelines focused on the upcoming short-term measures to be introduced from November 2022 – the Energy Efficiency Existing Ship Index (EEXI), the annual operational carbon intensity indicator (CII) rating and an enhanced Ship Energy Efficiency Management Plan (SEEMP).

The MEPC adopted a series of guidelines to support the implementation of these measures as well as approving draft amendments to appendix IX of MARPOL Annex VI on the reporting of EEXI and CII values to the IMO Data Collection System (DCS). The committee also agreed to include a new workstream on further revision of the IMO DCS in the agenda of the next working group.

An earlier intersessional meeting had focused on the debate around lifecycle assessment of marine fuels – seen as a critical step in ensuring that maritime emission regulations do not simply transfer emissions from sea to land. Guidelines on lifecycle GHG/carbon intensity for marine fuels (LCA guidelines) had been drafted, and MEPC 78 established a separate correspondence group to further the work.

The correspondence group will submit an interim report to MEPC 79, and final draft guidelines to be adopted by MEPC 80. The guidelines will allow for a Well-to-Wake calculation, including Well-to-Tank and Tank-to-Wake emission factors, of total GHG emissions related to the production and use of alternative marine fuels.

Arguably the biggest decision at MEPC 78 was on the long-debated International Maritime Research and Development Board, which proposed an innovation fund supported by a US$2 per tonne fuel levy. Much of the previous discussion had centered on how to ensure that the measure adequately supports the transitions of developing countries and those particularly exposed to the impacts of climate change.

Despite an updated proposal that would have added US$50 million to IMO’s technical capacity building programme – a near tenfold increase in funding for that project – no consensus was agreed. Instead the suggestion has been kept on the table to be considered among mid-term measures.

The committee noted the progress made by the intersessional working group in advancing towards the developing mid-term measures integrating various technical and carbon pricing elements. It noted the need for additional information on the proposed mid-term measures and encouraged proponents of measures to work together between MEPC meetings with a view to combining elements from proposals into a basket of measures.

The frustration of the IMRB proponents was evident – primarily through a frank statement released by the International Chamber of Shipping after the decision to include it under discussion as a mid-term measure rather than accept it as a short-term measure.

“By refusing to take forward the shipping industry’s proposed research and development fund, the IMO has wasted its opportunity to kick start a rapid transition to zero-carbon technologies which will be vital if we are to decarbonise completely by 2050,” said Guy Platten, Secretary General, International Chamber of Shipping.

“Despite the support of many IMO states, we have been frustrated by short-sighted political manoeuvring which has led to the proposal in effect being killed. The signal this sends means that the financial risk associated with green investment will remain high, slowing down efforts to switch to zero-carbon fuels as soon as possible.”

What’s next?

If progress seemed frustratingly slow at MEPC 78, there were some important outcomes. The reinforcement of MEPC 80 next year as the deadline for a revision of the GHG ambition will focus minds on that date, although the wide range of opinions indicates consensus will not be easy.

The allocation of more time to discussion on mid-term reduction measures between MEPC meetings will be welcomed by some and resented by others who are already concerned about the time and resources being poured into GHG discussions. But no one denies the work is crucial and the shortened virtual MEPC meetings mean more time for discussion is needed.

The EEXI and CII will enter force supported by a range of guidance and with a pledge to review how well they work by 2026. Time will tell how these affect the pace of shipping’s decarbonisation, especially with little focus on how the regulations will be enforced.

The next intersessional working group is provisionally scheduled to meet early December and has been set a clear roadmap in the terms of reference laid out at MEPC 78. It will aim to complete a circular on the Procedure for assessing impacts on States of candidate measures as well as consider mid-term measures and the revision of the IMO’s Initial GHG Strategy. It will also be charged with looking at incorporating lifecycle assessment of marine fuels into any measures.

A lot now rests with the intersessional working group. Progress there will determine the success of MEPC 80 in advancing the ambition of shipping’s emissions reduction, and deciding the mid-term steps it will