Background

Reduction of GHG emissions from international shipping has been on the IMO agenda for many years. Regulatory requirements for new ships’ energy efficiency 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 repeatedly recognised that their framework convention is unsuitable to address emissions from international shipping, and therefore left the initiative to IMO. 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 has agreed to pursue further discussion on GHG emissions via a 3-step approach, with the first step being a data collection scheme to form the basis of the second step, being data analysis. The third step is a discussion and potential agreement on further measures to enhance energy efficiency in international shipping, if required.

The IMO also 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 objectives:

• carbon intensity of the ship to decline through implementation of further phases of the energy efficiency design index (EEDI) for new ships
• to review with the aim to strengthen the energy efficiency design requirements for ships with the percentage improvement for each phase to be determined for each ship type, as appropriate;
• carbon intensity of international shipping to decline
• 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
• GHG emissions from international shipping to peak and decline
• 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 CO^₂ emissions reduction consistent with the Paris Agreement temperature goals. 

BIMCO’s position

• BIMCO welcomes the IMO Initial GHG Strategy and supports its vision and objectives.
• 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 limit transport supply. The objective should be to limit GHG emissions from ships without compromising the shipping industry’s irreplaceable role in the global supply chain.
• The mandatory Energy Efficiency Design Index (EEDI) for new ships and the SEEMP for all ships are effective regulation of CO2 emissions and provide, in BIMCO’s view, a tangible contribution to the global efforts to combat climate change. The strengthening of EEDI targets, as called for in the IMO GHG IS, should in principle be implemented through the introduction of additional phases rather than amending the existing agreed phases.
• BIMCO is concerned with the continued reliance on the 3rd IMO GHG Study results which has since proved to be mis-leading and led to two subsequent revisions. BIMCO will work to ensure that the terms of reference for the 4th IMO GHG Study adheres to the terms of reference. Furthermore, most scenarios modelled in that study are incompatible with the Paris Agreement temperature goal of well below 2 degrees C, and assumes global GDP growth for future years which are extraordinarily high and lack any correlation to historic data or near-term expectations by e.g. OECD and IMF.
• BIMCO supports the agreed 3-step approach to enhancing energy efficiency of international shipping and welcomes the IMO adoption of the mandatory data collection scheme as the first step.
• BIMCO supports that short-term measures to reduce GHG emissions should be developed according to IMO's goal-based standards' (GBS) framework, which consists of at least one goal with associated functional requirement(s), to which conformity is ensured by rules/regulations.  The functional requirements provide the criteria to be satisfied in order to meet the goal(s), while the rules and regulations are the prescriptive requirements applied in order to meet the goals and functional requirements.
• BIMCO supports speed optimisation and finds it imperative that shipping reduces its GHG emissions by locking in the reductions already achieved. Additional emissions reductions should also be pursued by converting waiting time at ports into sailing time.
• Operational efficiency indices, such as the IMO Energy Efficiency Operational Indicator (EEOI), are overly simplistic or even misleading on an individual ship basis and should, therefore, not be considered for regulatory purposes. Also, such indices could be wrongly perceived as valid selection criteria when assessing the efficiency of a ship prior to chartering.
• Regulations should provide incentives for owners to invest in low-carbon technology. If technical and operational measures cannot wholly meet agreed reduction targets, then any funds generated by means of a globally applied Market Based Measure (MBM) for shipping must be controlled by the IMO and mostly be disbursed to support further technological development focused on energy efficiency in shipping aimed at new and existing ships.
• BIMCO insists that the EU must align its MRV regulation to IMO’s data collection system.