LAST week, as expected, the United Nations agency that regulates global shipping agreed to a revised strategy to reduce greenhouse gas (GHG) emissions from international shipping.

Also as expected, the 80th session of the Marine Environment Protection Committee (MEPC 80) of the International Maritime Organization (IMO) left crucial details to be hammered out over time, if they ever can be. 

The IMO put it like this: “The revised IMO GHG Strategy includes an enhanced common ambition to reach net-zero GHG emissions from international shipping close to 2050, a commitment to ensure an uptake of alternative zero and near-zero GHG fuels by 2030, as well as indicative checkpoints for 2030 and 2040.”

Translating that enhanced common ambition into reality is not going to be plain sailing. As IMO secretary-general Kitack Lim told the MEPC: “The adoption of the 2023 IMO Greenhouse Gas Strategy is a monumental development for the IMO, and opens a new chapter towards maritime decarbonisation.

“At the same time, 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. However, with the revised strategy that you have now agreed on, we have a clear direction, a common vision and ambitious targets to guide us to deliver what the world expects from us.”

Lim pointed to the unanimous support from all IMO member states. However, even getting a broad-brush agreement on the new strategy was difficult. For example, in the discussions, the Indian delegate emphasised the need to avoid unrealistic targets that could lead to flawed policies, unsustainable investments and immature technological solutions.

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Despite considerable support for a “fund and reward” proposal for a levy on marine fuel, Argentina, Brazil and China reportedly remained strongly opposed to idea.

As reported in The Business Times last Friday (Jul 7), environmental campaign groups were dismissive of the revised IMO targets; they complained that the new IMO strategy was insufficient under the framework of the landmark Paris climate accord.

The NGOs instead want the shipping sector to implement a 50 per cent reduction by 2030, and deliver carbon neutrality by 2040.

Within the shipping community, the reaction has been to welcome the principles agreed, but also to highlight that much more work needs to be done.

The International Chamber of Shipping (ICS) deputy secretary-general Simon Bennett said after MEPC 80 ended: “The ICS greatly welcomes the ambitious agreement reached by governments at the IMO today for shipping to achieve net-zero emissions ‘by or around 2050’, in line with the Paris Agreement and the commitment made by the shipping industry at COP 26 in Glasgow back in 2021.

“This historic IMO agreement gives a strong signal to ship operators, and most importantly, to energy producers who must now urgently supply zero-GHG marine fuels in very large quantities if such a rapid transition is to be possible.”

But he added: “The checkpoints agreed for 2030 and 2040 are particularly ambitious. The industry will do everything possible to achieve these goals, including the 70 per cent to 80 per cent absolute reduction of GHG emissions now demanded of the entire global shipping sector by 2040. 

“But this can only be achieved if the IMO rapidly agrees to a global levy on ships’ GHG emissions to support a ‘fund and reward’ mechanism, as proposed by the industry. We urgently need to reduce the cost gap between conventional and alternative marine fuels, and incentivise the production and uptake of new fuels at the scale now required to meet this accelerated transition. The year 2040 is less than 17 years away, and the availability of zero-GHG marine fuels today is virtually zero.”

The ICS has been pushing hard for a levy on bunkers, and according to Bennett: “It is very positive that a majority of governments now support a levy for shipping involving flat-rate contributions by ships per tonne of GHG emitted to an IMO fund to expedite a rapid transition.

“The ICS ‘fund and reward’ proposal remains firmly on the table as a deliverable solution, and will now be subject to a comprehensive impact assessment by the UN Conference on Trade and Development to be completed by early next year, so that an economic measure can be adopted in 2025. This will be vital if we are to reach a take-off point by 2030 for the use of new fuels to achieve the extremely ambitious goal which the IMO has now set for 2040.”

Liner shipping, the global containerised shipping sector, has already come under great pressure to reduce its carbon footprint, and the sector is responding. For example, major carrier Maersk Line has committed to “net zero across the business” by 2040.

In the same vein, John Butler, the president and CEO of the World Shipping Council (the body representing container lines), noted: “Liner shipping is already investing in renewable fuel-ready ships, and today’s decision broadcasts 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. The next two years will be critical. For 2050 targets to be achievable, the IMO member nations must develop and agree on a life-cycle-based global fuel standard and economic measure by 2025, so they can be implemented by 2027.” 

Not surprisingly, given that the whole debate is essentially about fuels, the International Bunker Industry Association (IBIA) had been active in discussions leading up to MEPC 80 and during last week’s meeting, highlighting many technical issues that need addressing. 

IBIA noted: “We brought information on the potential of Ship Board Carbon Capture (SBCC) as a viable option to expedite the reduction of total shipboard CO2 emissions. That work will be taken forward at future GHG discussions at the IMO.” (SBCC entails the capturing of CO2 emissions from vessel operations, thus reducing the vessel’s overall climate impact.)

My own view is that SBCC is a dark horse in the decarbonisation of shipping, just as sulphur scrubbing of emissions was when the IMO’s sulphur limits were being established. That is not what the environmental campaigners would like, but carbon capture, either pre-combustion and using LNG or post-combustion and still using heavy fuel oil, would be a typically pragmatic response by the industry.

So does it matter that last week’s agreement was vague and apparently largely dependent on an IMO bunker levy that may not happen? The answer, of course, is “yes” and “no”.

Yes, it will be bad for shipping if a global regime is not put in place. Operating shipping services will be more difficult and messy as regional regulations proliferate.

But in terms of the industry moving towards decarbonisation, the answer is “probably not”.  Much of the other technical work under way at the IMO is already pushing shipping in the right direction. More importantly, shipping is under huge and steadily increasing commercial and local political pressure to move towards net zero.

Right now a mind-boggling range of alternative fuels and technologies are being developed. Huge amounts of money are already being poured into shipping’s decarbonisation, and that will only increase. The decarbonisation of shipping is already well under way.