Shipping and climate change: the IMO is making progress – though worryingly slowly

The Paris Agreement, which was adopted in the UN Climate Change Conference in December 2016 in Paris, does not include aviation and shipping in its regulatory framework. Acknowledging the global and complex nature of shipping activities, the Kyoto Protocol entrusted the reduction of GHG emission from marine bunker fuels to the International Maritime Organisation (article 2 (2)). One of the purposes of the IMO is to ‘encourage and facilitate the general adoption of the highest practicable standards in matters concerning the … prevention and control of marine pollution from ships’ (article 1 (a) of the IMO Convention), and its Marine Environment Protection Committee (MEPC) has the task of negotiating, adopting and amending international conventions, regulations and measures related to the protection of the marine environment. Since 1997, the MEPC has been actively engaged in discussions concerning the reduction of GHG emissions from ships and the elaboration of a legal framework for energy efficiency in the shipping industry as a means of tackling climate change. The IMO has adopted a number of measures to address these issues, but progress has been slow.

Despite encouragement from the former IMO Secretary General to ‘bring the spirit of the Paris Agreement to IMO’ and by the UN Secretary General to continue the momentum of the Paris Agreement, the response in the MEPC in its 69^th Session which took place from 18-22 April 2016 was less enthusiastic, though some progress was made. This post discusses the recent discussions and negotiations in the IMO MEPC with respect to reduction of emissions from ships.  

Measures up till now

In 2011, after years of strenuous negotiations, the MEPC adopted mandatory measures to enhance energy efficiency and reduce GHG emissions from ships. These technical measures, which came into force in January 2013, include the Energy Efficiency Design Index (EEDI) for new ships and the adoption of a Ship Energy Efficiency management Plan for all ships (Regulations in Chapter 4 MARPOL Annex VI). This decision was heralded as a historic event as these measures formed the first legally binding agreement on climate change since the Kyoto Protocol. Another important breakthrough in the negotiations was the adoption of a Resolution on the promotion of technical cooperation and transfer of technology in 2013 (MEPC 65/22). This was to complement the technical measures adopted earlier and to address concerns raised by developing states regarding the application of the principle of Common but Differentiated Responsibility (CBDR) which was a contentious issue in the discussions. The main mechanism established by the Resolution was the Ad hoc expert working group on facilitation of transfer of technology for ships which was mandated with assessing the implications and impacts of the implementation of the new regulations, identifying technology transfer and financial needs of developing states, and creating an inventory of energy efficiency technologies for ships.

Further progress in MEPC 69 in April 2016

Some further progress was made in the recent 69^th session of the MEPC. The Ad hoc expert working group on facilitation of transfer of technology for ships finalised its work and submitted its report alongside a set of recommendations for the implementation of the regulations in chapter 4 MARPOL Annex VI. Suggestions by some developing states for the renewal and continuation of the mandate and work of the ad hoc group were not endorsed, but the Committee instructed the Secretariat to keep it informed of further developments in this respect. Special mention was made to a collaborative project between the IMO, GEF and UNDP ‘Transforming the global maritime transport industry towards a low carbon future through improved energy efficiency’ (GloMEEP) which will consider the energy efficiency technologies inventory developed by the ad hoc group and develop an information portal for energy efficiency technologies for ships by June 2016.

The MEPC further continued its work on the review of the EEDI and established a correspondence group which will consider various technical issues related to the implementation of the EEDI but also whether ‘the time periods, the EEDI reference line parameters for relevant ship types and the reduction rates set out in regulation 21 should be retained or, if proven necessary, should be amended as appropriate’. The latter is important as an intervention by the Clean Shipping Coalition (CSC) pointed out that recently-built ships currently exceed the Phase 2 EEDI requirements which are thus insufficient to incentivise the industry and contribute to a ‘feasible and obvious response to the Paris Agreement’ (MEPC 69/7/3 and 69/5/9).

However, the biggest accomplishment of MEPC 69 was the approval of a mandatory system for data collection for fuel consumption as an amendment to chapter 4 of MARPOL Annex VI. Despite the fact that in previous sessions some delegations supported the adoption of a voluntary data collection system, there was consensus in MEPC 69 that the system should be mandatory. A few issues remain unresolved, but the system is expected to be adopted in October 2016 in MEPC70. This is the first step in a phased approach for the consideration and development of further technical and operational measures for enhancing the energy efficiency of international shipping.

Controversy

As a follow-up to the Paris Agreement, a number of states (Belgium, France, Germany, the Marshall Islands, Morocco and Solomon Islands) submitted a proposal for the MEPC to ‘develop a work plan with an associated timetable’ to define the ‘fair share’ of international maritime transport in the global efforts to reduce GHG emissions (document MEPC 69/7/2; see also suggestions by CSC in document MEPC69/7/3). This was to contribute to the objective of the Paris Agreement to hold ‘the increase in the global average temperature to well below 2 C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 C above pre-industrial levels’ and ‘strengthen the global response to the threat of climate change’ (article 2). The International Chamber of Shipping also submitted a proposal for the development of an ‘Intended IMO Determined contribution’ on CO2 reduction for international shipping and argued that this work flows from the Paris agreement and the Paris conference as ‘all sectors of the global economy are now expected to determine how they can reach peak CO2 emissions as soon as possible before eventually decarbonising completely’ (document MEPC 69/7/1). Industry organisations, such as the World Shipping Council, Cruise Lines International Association, Intertanko and International Parcel Tankers Association, lent their support to the launch of a process ‘to define a long-term carbon objective for international shipping’ under specific principles, but also noted that collection of data was important for ‘formulating a realistic and effective carbon policy’ (Document MEPC 69/7/4).

The issue was symbolic, ie to send a strong signal to the world that the IMO is as effective as the UNFCCC Conference and a legitimate standard-setter in the field, as well as pragmatic, reflecting the need to expedite the process and ensure that IMO’s response is timely and appropriate.

A lengthy and rather tense discussion ensued where almost all state parties to the MEPC took the floor and expressed their views. The suggestion had the support of many states which sought to capitalise on the momentum created by the Paris conference and to initiate a process for responding to this momentum. However, a number of states opposed it (rather intensely). Their view was that the IMO had a work-plan which consisted of the three-phase approach, and that any discussions on determining a ‘required emission reduction effort’ was premature, unscientific (as it would not be based on scientific data) and not in line with the phased approach. They noted that the latter was adopted with the view to developing informed decisions at the third phase once the data collection and analysis had been completed. States in support of the proposal noted that the two processes are complementary and not contradictory. The phased approach (based on a proposal by the USA) received support by states in MEPC 65 and 66 as a way to overcome the impasse in the discussions regarding further measures (especially market-based) which had been unsuccessfully debated for a number of years. This allowed the MEPC to further continue its work on technical and operational measures with respect to energy efficiency in shipping, but it was not perceived to be the sole way forward for the Organisation with respect to reducing GHG emissions from ships.

However, any mention of a work-plan in the MEPC69 Report was opposed by some delegations, and the Committee, as a compromise suggested by the Chairman, agreed to the establishment of a working group in its next session which will discuss in depth how ‘to progress the matter’.

Way forward

All states in the IMO MEPC have expressed the view that the IMO is the appropriate organisation with a clear mandate to discuss and address issues related to reduction of emissions from ships. Its role and contribution to tackling climate change have been acknowledged, and its accomplishments have been celebrated. However, progress has been slow, and concerns have been raised that the IMO may become irrelevant. Comments were made by states in the MEPC that for the IMO ‘to remain credible a work plan needs to be developed, otherwise the issue will be dealt with elsewhere’. States and other stakeholders are considering options on how to tackle emissions from shipping. The EU has already adopted an MRV system (Regulation (EU) 2015/757 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport) and it is also considering further measures for integrating maritime emissions into its emission reduction policy including GHG reduction targets and market-based measures. Initiatives from private maritime actors have also been suggested as a plausible alternative.

The preferred and more effective way forward would be for the IMO to respond timely and efficiently to the challenge of ships’ emissions and climate change. The MEPC has indeed adopted a phased approach but this is not a proper road-map and work-plan. The time framework for the adoption of further measures is missing, and with the current scheme it will be years before the IMO addresses the issue of the ‘fair share’ of the shipping industry in tackling climate change.

The discussion will continue in a more structured way in the working group in MEPC 70 in October – though judging from the debates in MEPC 69, even the consideration of the terms of reference for the working group might be problematic and controversial.  With respect to further measures, a number of controversial issues remain. These include how to accommodate the principles of CBDR and non-discrimination, how to ensure that maritime transport will continue to contribute to international trade, sustainable development and poverty eradication, and finally how to mitigate the potential socio-economic ramifications of any measures especially for developing states including remote small island states whose economy and trade are dependent upon maritime transport.

Indeed, shipping is the most energy efficient means of transport; however, emissions from international shipping are predicted to increase by 2050 if no further measures are adopted (Third IMO GHG Study 2014). Now that the international community has demonstrated its resolve to tackle climate change as demonstrated by the Paris Conference and Agreement, the IMO should agree on a concrete and robust work plan so as to respond timely and effectively to the threat of climate change.