WSC identifies 4 cornerstones for effective IMO GHG regulations

• The World Shipping Council identified four cornerstones for effective International Maritime Organization’s greenhouse gas regulations

• The four are greenhouse gas fuel intensity standards; economic measure or GHG price; vessel pooling for transition; and full life cycle transparency

The World Shipping Council (WSC) identified four key elements for effective International Maritime Organization (IMO) greenhouse gas (GHG) regulations.

In a paper released on December 7, the WSC outlined frameworks “critical” to an effective IMO GHG agreement, in line with the liner shipping’s commitment to decarbonizing “quickly and efficiently” and the goal of net zero emissions for shipping by 2050.

In a statement, the shipping council said the paper is its first contribution to negotiations at IMO MEPC (Marine Environment Protection Committee) 81 to be held from March 18 to 24, 2024 at the IMO Headquarters in London.

The WSC paper, labeled MEPC 81/7/2, highlights the following as critical components for a global legal instrument and contribution to IMO climate negotiations:

• Set GHG fuel intensity standards upfront: Decarbonizing shipping demands substantial investments in technology, vessels, and renewable energy. To instill confidence and ensure future investment, GHG fuel intensity standards for each period until 2050 should be established when the regulatory agreement is made. This upfront definition is essential for certainty in technology, vessel, and renewable energy investments.
• Establish an effective economic measure or GHG price: To meet climate targets, IMO’s financial measures must economically incentivize both ship owners and energy providers to invest in technologies delivering significant GHG reductions. The paper advocates for an economic measure or GHG price that aligns with climate targets, creating a globally level playing field and encouraging investments in low-GHG technologies and energy sources. IMO regulations should evaluate and reward ships based on achieved GHG reductions.
• Enable transition with vessel pooling: Achieving net-zero requires a shift to renewable energy sources. Pooled compliance with IMO’s low GHG fuel standard allows companies to invest in innovative zero-emission technologies across a fleet of ships, fostering efficient transitional investments and supporting smaller carriers.
• Incorporate full life cycle transparency: IMO regulations should ensure the best climate impacts by providing shipowners and fuel providers with information for efficient and environmentally effective investments. A life cycle analysis of all fuels, including biofuels, is crucial for understanding climate impacts, avoiding stranded investments, and driving effective environmental investments.

The WSC urges IMO member nations to adhere to the IMO GHG Strategy timeline, emphasizing the need to establish the regulatory framework by 2025 for implementation by 2027.

“Liner carriers are committed to delivering on the 2050 net zero target and are already investing in renewably propelled ships. To ensure there are renewable fuels available to run those ships in a competitive manner, energy providers must see regulations written in the next two years that demonstrate sufficient demand for new fuels to justify the massive investments need in the immediate future. The challenge for member states at IMO is not just to agree, but to agree on regulations that will provide investment certainty. If we can get this right from the beginning, we will speed the energy transition and make it more affordable by avoiding stranded investments,” said John Butler, WSC president & CEO.

“Liner shipping wants to decarbonise our industry as soon as possible and we will continue to lead the way in enabling shipping’s transition to zero. But we cannot do this alone, and we cannot do it without the volumes of renewable energy and fuels this transition requires. If IMO member nations build upon these four cornerstones in developing the future greenhouse gas regulations, the shipping industry and fuel providers will have the necessary investment certainty to reach our goal. It is time to move from ambition to action and work together to deliver net zero by 2050,” he added.