Quick summary MEPC77: Still left to individual companies to drive shipping decarbonisation

December 1, 2021

The outcome of the International Maritime Organisation (IMO) meeting shows that global regulation will not drive the next few years’ vital development towards shipping decarbonisation. With no agreement on carbon pricing measures, no funds dedicated to support decarbonisation, and even no change in the initial GHG reduction strategy it is still left to individual companies to drive the decarbonisation.

The 77th Marine Environment Protection Committee (MEPC77) was completed leaving a wake of disappointment amongst the shipping industry. COP26 ended with a strong commitment to net zero decarbonisation by 2050 and many were hoping the IMO would take action and meet the challenge. Unfortunately, that was not the case. The key topics in the agenda included the revision of the Initial Strategy, the approval of a 5-billion-dollar research and development fund, an agreement on a market- based measure and the resolution on black emissions in the Arctic.

Revision of the Initial Strategy

The Initial Strategy aims to reduce shipping GHG emissions from ships by at least 50% by 2050. Following the IPCC report in August and the scientific evidence showing the rapid effects of climate change, it has become clear that the current target of the IMO is not ambitious enough to realistically meet the Paris Agreement goal of keeping global temperatures below 1.5 degrees Celsius by 2050.  

A proposal set forth for the revision of the Initial Strategy to achieve net zero emissions in the shipping industry by 2050 was only accepted by Canada, Japan, New Zealand, Ukraine, the UK, the US, Vanuatu and Iceland, effectively halting its approval. Several countries which expressed support for the resolution’s target during COP26 failed to vote in favour of it, including the European Union countries. There was, however, widespread support for net zero decarbonisation by 2050, but the discussion for the revision of the strategy was postponed until 2023.

Market-based measures

Several proposals were on the table including a cap-and-trade system as well as the introduction of a carbon levy. It was clear that a system revolving around a carbon levy was preferred, but no decisions were made. One of the key issues raised was the distribution of funds arising from the carbon levy system between rich and poor nations and a working group was set up to discuss the options available in the MEPC 78 meeting in June 2022.  

ICS proposal of a 5-billion-dollar research and development fund

The International Chamber of Shipping put a proposal forward for the establishment of a research and development fund which could raise up to 5-billion-dollars towards the development of new green technologies and alternative fuels. The fund would be funded by a mandatory contribution of 2 dollars per tonne of fuel consumed by ships. The proposal was not approved because of time constraints, which did not allow member states to consider it in detail. This proposal was also postposed for the next MEPC meeting.

Black emissions in the Arctic

A resolution urging ship operators to use cleaner distillate fuels instead of HFO while sailing in the Arctic was approved, however the measure is voluntary following pushback from Russia, China, Japan and Saudi Arabia. This is a positive development towards tacking black emissions in the Arctic, but the inclusion of the word voluntary severely limits its impact.  

Siglar CDO Geir Olafsen

MEPC77 concludes with little action

Expectations following the COP26 were higher than what the IMO managed to deliver during the MEPC 77. The Siglar CDO, Geir Olafsen, sums up the lack of progress:

“No carbon tax or levies were introduced, nor dedicated funds to support decarbonisation, and even the reduction strategy remains unchanged”.

The outcome of the IMO meeting shows that global regulation will not act as a catalyst in the next few years’ vital development towards shipping decarbonisation, and Olafsen underlines the role of the shipping ecosystem:  

"With IMO indecisive, it is still left to individual companies, including cargo owners, to drive the decarbonisation".

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Want to know more about the outcomes of the 76th MEPC meeting? We've got an article for you: 
The IMO adopts operational emission reduction measures despite strong criticism

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What does COP26 outcomes mean for shipping?

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