MEPC 81: The moment things changed?

Last week marked the 81st session of the International Maritime Organisation (IMO)’s Marine Environment Protection Committee – a meeting that is more commonly and straightforwardly referred to as MEPC 81.  

The session saw the IMO's debating arena doors thrown open for a week of increasingly pivotal, challenging and nuanced discussion on a range of environmental issues facing the global shipping industry.  

The session had eight focus areas: taking climate action, energy efficiency onboard ships, tackling marine pollution, ballast water management revisions, Emissions Control Areas, ship recycling, marine diesel engine, and underwater noise reduction. 

Most prescient, of course, were the debates around how the IMO can build on the progress made last year when it agreed its Greenhouse Gas (GHG) Strategy. 

It is also worth noting that this was the first MEPC session helmed by the newly elected IMO Secretary-General Arsenio Dominguez, who shared his perspectives on the strength of shipping’s regulator during his plenary speech. 

By far the most important decarbonisation outcome of MEPC 81 was member states reaching an agreement on “an illustration of a possible draft outline of an IMO net-zero framework” for cutting GHGs. The draft outline illustration proposes to create a new Chapter 5 of MARPOL Annex VI containing regulations on its net-zero framework, including a goal-based marine fuel standard that would regulate the phased reduction of marine fuel GHG intensity, and an economic mechanism to incentivise the transition to net-zero. 

These are the mid-term GHG reduction measures that were specified in last year’s strategy, so in those terms the IMO has made a step in the right direction from last year’s already relatively big leap. Discussions of the economic mechanism, which will probably take the form of a carbon tax or levy, have advanced to the point where many shipowners now feel it is an inevitability, not a possibility. 

The significance of this shouldn’t be understated. While proposals for what form this economic mechanism should take will become the next great arena for industry decarbonisation debate, there would be no single quicker way to spur decarbonisation action, clean technology uptake, and future fuels development than a direct price on the carbon the industry emits.  

The other open question is timing, with little clarity at this point about when the industry can expect these measures to take effect. Debate will continue at the upcoming sessions of MEPC later this year.  

Other important highlights from the session include: 

• The approval of two new Emission Control Areas (ECAs), in Canadian Arctic Waters for NOx, SOx and PM, and in the Norwegian Sea for NOx and SOx.   

• An agreement that well-to-wake (WtW) should be the default emissions factor applied to future regulations.   

• Revisions set out under the Ballast Water Management (BWM) Convention and the approval of interim guidance on the application of the Convention to ships operating in challenging water quality conditions.

These developments come alongside a host of smaller updates and amendments to areas such as energy efficiency, marine litter and ship recycling.  

A sceptic might think that all of this means that the industry will be left with a lot on its plate to comply with. There are still frustrations about the lack of marine fuel infrastructure and availability, technological maturity, and the overall cost of decarbonisation.  

We must also consider the fact that regional and national regulators are adopting their own rules to support the overall objectives of the Paris Agreement. For example, at the start of this year shipping came under the European Union’s Emissions Trading Scheme (EU ETS) - a cap and trade system for carbon emissions – for the first time. Across the pond, the Clean Shipping Act 2023 was introduced by Congress, which will require each vessel to comply with standards on the carbon intensity of fuels from 2027. 

In other words, the direction of travel is clear. Good luck to anyone still trying to fight against the decarbonisation tide. A cursory look at TradeWinds or Lloyd’s List on any given day provides useful proof of the genuine efforts underway to decarbonise.  

For example, Bureau Veritas recently issued a whitepaper exploring the industry’s current decarbonisation pathways, Proman Stena Bulk continues to demonstrate that methanol as a marine fuel is a viable solution today, and PowerCell has already proven the role for hydrogen fuel cells in the marine energy mix with the largest ever maritime installation of fuel cells last year. 

BLUE will continue to be an advocate for ambitious regulatory targets, while supporting our clients to communicate their sustainability strategies and knowledge of marine decarbonisation clearly, accurately and honestly. The progress made at MEPC 81 should be hailed as a genuine step in the right direction, and I hope that in ten years, we will look back at the last twelve months as the moment when shipping’s decarbonisation journey really changed for the better, bolder and brighter.