While it would have been encouraging for the industry and other relevant stakeholders to see more decisive signals on what the IMO ambition level is likely to be in 2023, the meeting did show that momentum has built on two key aspects:
• Zero GHG by/no later than 2050 was mentioned by an increasing number of IMO Member States –which increases the likelihood of this target or similar being the outcome in 2023, which in turn dramatically increases the rate at which shipping will need to increase efficiency, ramp up its use of zero emission fuels, and phase out fossil fuel and incremental fuel solutions.
• The need for an equitable transition, and the components that this entails, possibly including out-of-sector deployment of revenues raised from GHG/carbon pricing. This increases the chance of a consensus being achieved in the difficult MBM/carbon pricing topic, a key enabler of flowing investment for the transition.
Dr Aly Shaw, Policy Lead at UMAS: “IMO’s current heading seems encouraging! It was reassuring to see the appetite for a fair and equitable transition has been carried forward from the last meeting into MEPC78! Looking forward, we may assume that we are on a path for a stronger ambition from IMO in the Revised Strategy and a continued focus on equity and fairness throughout discussions on future policy measures, including emissions pricing!”
MEPC78 also accepted the outcomes from the two recent intersessional meetings (ISWG – GHG 11 and 12) that report into Committee. MEPC is the senior, decision-making body, formalising the conclusions of these meetings. Among other points, conclusions include:
• ISWG 11 – a commitment to develop a set of lifecycle guidelines. Draft guidelines already exist, which are based on using a well-to-wake framework (including production of fuels) to assess the GHG emissions and sustainability credentials of different fuel/tech solutions, but urgently need to be finalised
• ISWG 12 – including a commitment to develop a basket of policy measures (for adoption agreement ~late 2023/24) which includes GHG/carbon pricing. For a more detailed read out of ISWG12, please see our report here.
Dr Tristan Smith, Director of UMAS said: “IMO continues to be on track for MEPC 80 in summer 2023 to be a key point at which direction, targets, GHG emissions framing (well-to-wake) and policy, including GHG pricing, will clarify. The momentum is building for a significant strengthening of ambition and policy action, which will then affect opportunities risks and values in the sector including in this decade. We hope this analysis of one of the staging posts is useful to help those affected.”
One change did occur to the next steps on Lifecycle guidelines. Instead of first being adopted at MEPC 79 as originally intended, they are now scheduled to be adopted at MEPC 80. The meeting also clarified that IMRB/F will now no longer move forwards as a standalone short-term measure proposal (which would mean a chance for imminent implementation), having failed to build sufficient support, but it will be considered as part of the discussions around a basket of mid-term measures. Assuming no further modifications to the schedule, this sets up MEPC 80 in summer 2023 to be a critical moment, when outcomes will clarify. Below is an overview of the policy timetable:
This is clearly a heavy workload for the Committee and the delegates, with a lot of overlapping, interacting and interdependent items that need to move forwards harmoniously. This creates risk that the work will not be completed on time, but also an opportunity to connect many of the different threads that make up ambition, action, and equity together to enable a progressive, comprehensive, multilateral global package aligned to preventing temperature warming exceeding 1.5 degrees.
Click here for a full read out of the discussions and key decisions from the meeting (https://www.u-mas.co.uk/wp-content/uploads/2022/06/MEPC-78-overview-UMAS.pdf).
Source: UMAS
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