IMO makes some advances on mid-term measures for GHG emissions reducti...

IMO makes some advances on mid-term measures for GHG emissions reduction

Published: 04 October 2024

Discussions continue on mid-term measures at the IMO – but what might this mean for industry?

The 81st session of the IMO’s Marine Environment Protection Committee (MEPC 81) held in March 2024 agreed that the basket of mid-term measures to implement the IMO strategy on reductions of GHG emissions from ships could be shaped around a set of “Possible draft amendments to MARPOL Annex VI on the net-zero-framework".

Development of these legal provisions was continued during the intersessional meeting of the working group on greenhouse gases (ISWG-GHG) in the week preceding the Committee’s 82nd session (MEPC 82) and continued during MEPC held from 30 September to 4 October. Significant convergence is seen on many aspects of the GHG fuel intensity standard and to a lesser degree on the aspect of a GHG emissions pricing mechanism.

There is still a debate over whether the purpose of the mid-term measures is to collect funds to spend on mitigation and adaptation both inside and outside the shipping sector while it also decarbonises shipping, or if the purpose of the measures is to decarbonise shipping and while doing so consequentially collect funds which could also be used outside the shipping industry.

The draft legal text still needs considerable work, both on details and on narrowing the options. This work will continue at a further intersessional session of the working group in February 2025 and also in the week preceding MEPC 83 in April of 2025.

MEPC 82 also had a lengthy discussion leading to approval of the report from the steering group on the comprehensive assessment of impacts on states. In particular, concern over the lack of a detailed assessment of the impact on food security was expressed by a large number of member states and the Committee agreed to initiate supplemental studies into this critical aspect before the next session.

It is difficult to predict the final shape of the mid-term measures but looking through the haze in the crystal ball we can perhaps try.

We could end with a GHG intensity fuel standard comprising a flexibility mechanism which allows for fleet compliance. This flexibility mechanism will likely also contain a ‘safety valve’ to allow ships which cannot comply via fleet pooling to pay instead. We would expect such a remedy, however, to become expensive. To cater for many member states’ DNIs (disproportionally negative impacts) from these measures, an additional element of GHG pricing may well be added. How high such additional price may be, how it should be collected and how the funds should be disbursed are open questions at this point.

Lastly, just to make it clear, consensus at IMO on the mid-term measures could also produce something very different than the above because "nothing is agreed until everything is agreed".

The schedule for the mid-term measures remains; Approval of the measures (draft legal text) at MEPC 83 in spring 2025. Adoption at an Extraordinary session of MEPC in Autumn 2025. Entry into force by 2027.

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