At MEPC 80, we saw that the IMO is responsive to the ambitious GHG targets being set within and beyond the industry. That’s the first of two key takeaways from the meeting, says e1 Marine Managing Director, Robert Schluter.
We saw from MEPC 80 that the IMO is willing to strengthen its decarbonization targets for shipping significantly. We have moved from a 50% GHG reduction ambition target by 2050 to net-zero by or around 2050. There are also interim targets of 20%, striving for 30%, in 2030 and then 70%, aiming for 80%, in 2040, compared to 2008 levels.
The first key takeaway from MEPC 80 is that the IMO is willing to recognise the ambitious goals within and outside the industry - the demands for change made by shippers and consumers worldwide. We can expect it will continue to respond and keep pace with society. While some may have been disappointed by the vague terminology of “by or around 2050,” it is possible that this will tighten up over time as progress is made.
There are two regulatory foundations set for ensuring this progress. A technical, goal-based agenda will ensure the phase-in of new fuels with reduced GHG intensity, and a carbon pricing mechanism will be introduced and linked to the GHG intensity regulations. The uncertainty about the details of these measures is common. Alternatives have been discussed at length and anticipated for years, and we can expect that they will be overcome gradually with due care taken to ensure they are workable.
The second key takeaway from MEPC 80 is the commitment to addressing life-cycle GHG emissions from shipping. MEPC 80 adopted the “Guidelines on Life Cycle GHG Intensity of Marine Fuels” (LCA Guidelines), which set out methods for calculating well-to-wake GHG emissions for alternative fuels and other energy carriers (e.g. electricity). However, the discussion of onboard carbon capture and storage was postponed until 2024, but it will ultimately be linked to the development work that will be ongoing on the LCA guidelines.
The LCA Guidelines highlight the agreement reached among member states for taking a well-to-wake approach to sustainability. Shipping will not just push responsibility for its emissions upstream. That will come at a cost. We can expect net-zero fuels to be expensive and their storage requirements onboard to be demanding.
What the industry needs is a viable pathway to decarbonization that is proven, safe, and viable now to meet this myriad of targets, especially as the likes of the EU, Canada, and the US could progress beyond IMO and impose their own individual measures to drive sustainable shipping. We’ve already seen this in California with the incremental introduction of its At Berth regulation. Ultimately, it means that we can expect strong demand for solutions during this decade as fuels such as methanol providing the pathway towards green hydrogen
To accelerate the availability of new technologies, such as fuel cells and solutions to enable a faster energy transition, the supporting frameworks must catch up. We need to foster a culture of flexibility and adaptability to rewrite the rule book regarding certification and commercial agreements that recognise the cost of investment alongside payback and broader benefits. From our own experience, it’s encouraging that there is a spirit of true collaboration throughout the product testing process, and the hours of trials we are conducting generate some valuable learnings. We are poised to provide a meaningful contribution to cleaner, efficient maritime operations through alternative fuels that can meet the IMO’s targets and look forward to working with vessel owners and operators to unlock shipping’s green future.