The International Maritime Organization (IMO) is the division of the United Nations (UN) which regulates shipping. The shipping industry is not directly regulated by the various international treaties which aim to tackle global warming at an international level, see our previous article, Decarbonisation and shipping - the coming change, for details. However, the IMO is committed to responding to the growing climate crisis and to ensuing that the shipping industry contributes to the global reduction of greenhouse gas (GHG) emissions. Accordingly, in April 2018, at the 72nd session of the IMO's Marine Environment Protection Committee (MEPC), the IMO voluntarily adopted an initial strategy on reduction of greenhouse gas emissions from ships setting out its plan for urgently reducing GHG emissions from shipping.
The key ambitions of the initial strategy are:
- to reduce the carbon intensity of international shipping, compared to 2008 levels, by 40%, by 2030;
- to increase that reduction to 70% by 2050;
- to reduce GHG emissions from international shipping, again compared to 2008 levels, by at least 50%, by 2050; and
- to achieve zero GHG emissions as soon as possible within this century, ie by 2100.
- The IMO is working to achieve these ambitions by way of a mixture of means, including pre-existing energy efficiency measures and new measures applicable in the short, mid and long-term.
In 1973, the IMO adopted the International Convention for the Prevention of Pollution from Ships (MARPOL). Originally orientated towards the prevention of oil pollution, MARPOL has developed since 1973 to deal with a broader range of ship-source pollution issues, including pollution by garbage, sewage, ballast water and stemming from the recycling of ships. MARPOL has also been developed to address pollution caused by GHG emissions and in July 2011, at the 62nd session of the MEPC, the IMO adopted the MARPOL Annex VI Regulations on Energy Efficiency for Ships (the Regulations).
The Regulations, which came into force on 1 January 2013, are the first rules to ever establish CO2 standards across any global sector. They apply to existing and newly built vessels, although in different ways, and set out various energy efficiency measures which ships must comply with.
For existing ships, the Regulations require that all ships have a Ship Energy Efficiency Management Plan (SEEMP). This is a management plan for improving the energy efficiency of the ship by operational means, such as by optimising vessel speed, increasing the frequency of hull or propeller cleaning, or by making different route choices to reach a destination or pass through heavy weather. Each ship's SEEMP is specific to that ship and will take account of the factors particular to it, such as the cargoes carried, routes sailed and dry docking schedule, as well as broader corporate or fleet level strategies for improving efficiency. To support the planning process the IMO has developed a monitoring tool, the Energy Efficiency Operational Index (EEOI), which ship owners and operators can consult to gauge the potential impact of any management changes they may make and thus weigh up the options from a more informed position.
Owners and operators already have an incentive to increase efficiency, so as to reduce fuel costs. The SEEMP planning process bolsters this by placing firmly on the agenda an opportunity to consider new technologies and practices at every stage in the operation of the vessel. Thereby increasing the likelihood of their take up, and of increased efficiency gains which will benefit owners, operators and the environment.
For new ships, the Regulations require compliance with the Energy Efficiency Design Index (EEDI), which takes a phased approach to setting minimum energy efficiency improvements for ships. The EEDI applies to most ship types and for each ship type and size a reference line, measured as grams of CO2 emitted per tonne mile and based on the average efficiency of ships built between 2000 and 2010, has been set. The EEDI requires that energy efficiency is improved, in phases, such that CO2 emissions are progressively reduced below the reference line.
The EEDI does not prescribe how the reduction of CO2 emissions should be achieved, rather it leaves ship designers and builders free to innovate and to continue the technical development of all components of the ship which contribute to fuel efficiency.
During phase one, running 1 January 2015 to 31 December 2019, the EEDI requires a 10% reduction of CO2 grams per tonne mile below the relevant reference line for newly built ships. In phase two, running 1 January 2020 to 31 December 2024, the EEDI requires a further 10% reduction of CO2 grams per tonne mile. Phase three of the EEDI, which was due to commence in 2025, requires an additional 10% reduction, meaning overall that ships being built in 2025 will be required to be 30% more carbon efficient than those built in 2000 - 2010. However, it is anticipated that the MEPC may, at its 75th session in November 2020, vote for phase three of the EEDI to be brought forward and to enter into force in 2022.
The MEPC will also consider in November 2020 whether the EEDI ought to be expanded in phase four to address all GHGs emitted from ships, including methane - which is emitted by LNG fuelled vessels and which is a potent GHG.
Pursuant to the publication of the initial strategy, the IMO is considering new short, mid and long-term measures for achieving its carbon intensity and GHG reduction ambitions.
Short-term measures - are to be finalised by 2023. These are goal-based, include technical and operational measures, and are aimed at achieving the 2030 target of a 40% reduction in the carbon intensity of international shipping. Three types of short-term measures are under consideration:
- those that can be considered and addressed under existing IMO instruments, these also include developments to pre-existing measures, such as the SEEMP and EEDI discussed above;
- measures that are not work in progress and are subject to data analysis; and
- measures that are not work in progress and are not subject to data analysis.
Some of the candidate measures under consideration include existing fleet improvement programmes, speed optimisation and reduction programmes and measures to address the emission of methane and volatile organic compounds.
Mid and long-term measures - mid-term measures are to be concerned with the period 2023 to 2030 and long-term measures with the period 2030 onwards. It is predicted that these measures will account for at least 50% of the change which needs to occur in order for the IMO to achieve its ambitions.
These measures are likely to require a high degree of innovation and to result in the global uptake of new fuels and new technologies. From 2023 onwards the IMO will start focusing its activities in these areas.
Candidate mid and long-term measures include programmes to implement the use of low and zero carbon fuels, programmes to develop and provide zero carbon or fossil free fuels, further operational efficiency measures and market-based measures, such as emissions trading, emissions related levies and emissions offsetting.
Impact on shipping
The IMO's GHG emission reduction measures impact ship owners on a number of fronts. For some time already, ship owners have been required by the Regulations to plan for and manage ship efficiency, and have been supported by the IMO to explore the available options and their likely impact. However, the tweaking and refining of current practises and technologies will only take the industry so far towards the IMO's goals. A major shift in technologies, especially in fuel preference, is envisaged by the initial strategy.
Additionally, the industry can anticipate that significant behavioural changes, such in 'just in time' arrivals at ports, are likely to either be required or more strongly incentivised in the future, so as to become widespread and normalised. These too will play a key role in accomplishing the targets set by the IMO.
With much still unknown there is perhaps a tendency to hang back on implementing new technologies and practices while owners and operators wait to see which have high take-up and are proven to be trouble free and effective. In the meantime, it is likely that retrofitting will play a major role in moving the industry towards accomplishment of the IMO's goals. Meaning that technologies which are designed to be adapted in several different directions in the future may become popular in the short-term as the industry hedges its bets on the global preference for future fuels.
Whatever the future may be, it is evident that an appreciation of rising efficiency standards, the targets for future reduction of GHG emissions, and the trajectory of the industry towards cleaner shipping, must inform the decisions made by owners and operators today if those parties are to future proof their investments and to achieve financial efficiency, as well as efficiency at sea.
One criticism levied at the global regime advanced by the IMO is that it is simply not progressing fast enough. Despite shipping's global nature, the EU was recently prompted by the IMO's pace of change to take its own action in relation to GHG emissions from shipping, voting in July 2020 for emissions from shipping to be included in the EU's Emissions Trading Scheme (EU ETS) with effect from 2023.
In our next article, we take a look at the EU ETS and how the shipping industry, and the UK, which is soon to complete its exit from the EU, may be impacted by the inclusion of shipping in the scheme.
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