BIMCO's updated position has been approved by the BIMCO Board of Directors.
Parties to the United Nations Framework Convention on Climate Change (UNFCCC) have recognised that the convention is unsuitable to address emissions from international shipping. The Paris Agreement, adopted at COP21 in December 2015, is silent about emissions from international shipping. It does, however, expect that “developed country Parties should continue taking the lead by undertaking economy-wide absolute emission reduction targets”. The overall aim of the Paris Agreement is “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels”.
Reducing emissions may be the single most important issue facing the shipping industry. The obstacles to achieving emissions targets cut across commercial business practices, which are normally beyond the scope of international regulation.
The International Maritime Organization (IMO) agreed on a Road Map to develop a Comprehensive IMO GHG Strategy by 2023. The Initial Strategy (IS) was adopted at in April 2018 with a vision to decarbonise shipping as soon as possible.
The IMO Marine Environment Protection Committee (MEPC) adopted the 2023 IMO Strategy on reduction of GHG emissions from ships. The strategy contains the following ambitions:
To clarify the pathway towards decarbonisation, the strategy further includes indicative checkpoints:
These indicative checkpoints will play a significant role when the implementing measures are developed. It is the intention that they form points on the trajectory towards the 2050 ambition of net-zero GHG emissions, and 2040 is only 17 years away. Ships being built now will be in service then. With mandatory measures also having been agreed to be developed by 2025 in order to implement the pathway, the industry faces some major changes.
As the transition to a low carbon future is likely to take a generation of ships, it necessitates having a mechanism to facilitate a level playing field in the marketplace for ships of both conventional and novel technological state. This is because freight rates are unlikely to correlate with the cost of operating ships using vastly more expensive fuels as long as cheaper fossil fuel alternatives exist.
The IMO decided at MEPC 57 to adopt nine fundamental principles, to which a future economic element of GHG reduction measure (formerly known as market-based measures ie MBM) shall adhere by being:
Removing the barriers for transition requires a collaborative approach among charterers, ports, cargo interests and ship operators, part of which includes the of use of incentivised contractual solutions. BIMCO will assist the transition by developing the necessary incentivised contractual solutions that support the principle of freedom of contract and business imperatives.
The 6th Assessment Report (AR6) published by the Intergovernmental Panel on Climate Change (IPCC) states that meeting the temperature goals of the Paris Agreement requires deep cuts in global GHG reductions before 2030 and net zero by 2050.
As a bunker delivery note (BDN) is only a note not a certificate, it cannot be assigned significant statutory documentary value. It is not possible for a ship to ascertain if the GHG intensity stated on a BDN is correct. Thus, the responsibility for ensuring that fuel suppliers state the correct Well-to-Tank (WtT) emission factors and compliance with sustainability criteria on a BDN must belong to the authorities under whose jurisdiction a fuel supplier operates.
BIMCO’s position
Veritas Petroleum Services (VPS) publish regular Bunker Alerts based entirely on fuel samples and have kindly permitted BIMCO’s Members to access this information.
The Bunker Alerts are not intended to be an evaluation of overall bunker quality in the port or area concerned, but usually highlight a specific parameter within the fuel which has raised a quality issue.
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