Background

Reduction of GHG emissions from international shipping has been on the International Maritime Organization (IMO) agenda for many years. Regulatory requirements for new ships’ energy efficiency design index (EEDI) were incorporated in MARPOL Annex VI in 2011 together with a requirement for all ships to carry a ship-specific energy efficiency management plan (SEEMP).

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 COP 21 in December 2015, is silent about emissions from international shipping.  It does, however, expect all sectors of the economy to contribute to the global efforts.

The IMO Fuel Data Collection System (DSC) was adopted on 1 March 2018 and requires monitoring, flag state verification and reporting to IMO of annually aggregated fuel consumption for all ships of 5000 GT and above. The first set of data for the year 2019 is available for analysis in 2020.

The IMO has agreed to a Road Map to develop a Comprehensive IMO GHG Strategy by 2023. The Initial Strategy (IS) was adopted at MEPC 72 in April 2018 with a vision to de-carbonise shipping as soon as possible. The IS contains the following important objectives:

• to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008; and
• to peak GHG emissions from international shipping as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008 whilst pursuing efforts towards phasing them out as called for in the vision as a point on a pathway of CO2 emissions reduction consistent with the Paris Agreement temperature goals.

BIMCO’s position

• Regulation of GHG for ships must be adopted by IMO and be transparent, harmonised and applicable to all ships irrespective of the flag they fly. Any possible GHG regulation for shipping should not regulate the capacity of the world fleet. The objective should be to limit GHG emissions from ships without compromising the shipping industry’s irreplaceable role in the global supply chain.
• BIMCO is concerned that inclusion of international shipping in the EU Emissions Trading Scheme (ETS) would negatively affect the good faith between IMO member states. BIMCO believes that a regional Market Based Measure (MBM) will collect payment for the same emissions as a global carbon pricing initiative, and other regional MBMs similarly. An EU ETS will thus inhibit global action at IMO.
• A regional MBM will by design only address a part of shipping’s emissions and its effect on emission reductions will similarly be negligible. On the contrary, a global MBM will address all shipping emissions and avoid carbon leakage. Real reductions of shipping emissions can thus be expected from application of a global MBM.
• BIMCO welcomes the IMO IS and supports its vision and objectives.

Short term, before 2023

• BIMCO supports the strengthening of EEDI targets as called for in the IS, which in principle should be implemented through the introduction of additional phases rather than amending the existing agreed phases.
• BIMCO agrees that GHG savings achieved through speed optimisation should be locked in through application of power limitation. Additional emissions reductions should also be pursued by converting waiting time at ports into sailing time.
• BIMCO supports other short term regulatory measures including those addressing methane slip, volatile organic compounds (VOC), and use of lifecycle GHG intensity guidelines.
• Operational efficiency indices, such as the IMO Energy Efficiency Operational Indicator (EEOI) or Carbon Intensity Indicators (CIIs), are overly simplistic or even misleading on an individual ship basis and should, therefore, not be considered for mandatory regulations. Also, such indices could be wrongly perceived as valid selection criteria when assessing the efficiency of a ship prior to chartering.
• BIMCO supports the establishment of an International Maritime Research Board to fund innovation, paid for by a mandatory contribution on fuel used by ships.

Medium term, 2023-2030

• BIMCO supports implementation programmes for effective uptake of alternative low- and zero-carbon technologies and fuels, provided that the lifetime GHG performance of each proposed alternative fuel is taken into account.
• Regulations should provide incentives for owners to invest in low-carbon technology. When viable solutions are commercially available, an international MBM could be considered to drive their uptake. An international MBM should preferably be a levy rather than ETS.
• Any MBM, ETS or levy on carbon emissions for the international shipping industry should be flag neutral and apply to the appropriate entity in control of the emissions.