IMO’s Revised GHG Strategy for Shipping: Details and Reactions

Member States of the International Maritime Organization (IMO) have adopted at revised strategy to reduce greenhouse gas emissions from international shipping.

The 2023 IMO Strategy on Reduction of GHG Emissions from Ships, with enhanced targets to tackle harmful emissions, was adopted Friday during a meeting of the Marine Environment Protection Committee (MEPC 80).

The revised IMO GHG Strategy aims to achieve net-zero GHG emissions from international shipping close to 2050, with a commitment to adopt alternative zero and near-zero GHG fuels by 2030 and indicative check-points for 2030 and 2040.

“The adoption of the 2023 IMO Greenhouse Gas Strategy is a monumental development for IMO and opens a new chapter towards maritime decarbonization,” said IMO Secretary-General Kitack Lim. “At the same time, it is not the end goal, it is in many ways a starting point for the work that needs to intensify even more over the years and decades ahead of us. However, with the Revised Strategy that you have now agreed on, we have a clear direction, a common vision, and ambitious targets to guide us to deliver what the world expects from us.”

“Above all, it is particularly meaningful, to have unanimous support from all Member States. In this regard, I believe that we have to pay more attention to support developing countries, in particular SIDS and LDCs, so that no one is left behind,” he said.

Details of the strategy, as outlined by the IMO, are below:

Levels of ambition

Levels of ambition directing the 2023 IMO GHG Strategy are as follows:

.1         carbon intensity of the ship to decline through further improvement of the energy efficiency for new ships

to review with the aim of strengthening the energy efficiency design requirements for ships;

.2         carbon intensity of international shipping to decline

to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, compared to 2008;

.3         uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to increase

uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to represent at least 5%, striving for 10%, of the energy used by international shipping by 2030; and

.4       GHG emissions from international shipping to reach net zero

to peak GHG emissions from international shipping as soon as possible and to reach net-zero GHG emissions by or around, i.e. close to 2050, taking into account different national circumstances, whilst pursuing efforts towards phasing them out as called for in the Vision consistent with the long-term temperature goal set out in Article 2 of the Paris Agreement.

Indicative checkpoints

Indicative checkpoints to reach net-zero GHG emissions from international shipping:

1. to reduce the total annual GHG emissions from international shipping by at least 20%, striving for 30%, by 2030, compared to 2008; and
2. to reduce the total annual GHG emissions from international shipping by at least 70%, striving for 80%, by 2040, compared to 2008.

Reactions are pouring in. Below is a roundup:

World Shipping Council (John Butler, President & CEO of the WSC)

“This marks a new beginning for shipping’s energy transition, with clear goals and milestones. There is much to do, and carriers are eager to continue the work together with regulators, fuel providers and technology providers to reach our shared climate targets.

“Liner shipping is already investing in renewable fuel-ready ships, and today’s decision broadcasts a strong global signal for investment to the entire maritime sector. We are counting on the IMO member nations to press on with the important work of developing and adopting a robust regulatory framework that will make these fuels available and competitive. The next two years will be critical – for 2050 targets to be achievable IMO member nations must develop and agree on a lifecycle-based global fuel standard and economic measure by 2025, so they can be implemented by 2027.”

BIMCO

BIMCO sees this as groundbreaking. The newly adopted IMO GHG reduction strategy translates to a reduction of around 90% on average at the individual ship level due to expected fleet growth. And 2040 is only 17 years from now.

Newer ships already on the water and those on order will exist well beyond 2040 and the emissions reduction outlined in the strategy will apply to these ships.

BIMCO President Nikolaus Schües recognises the monumental change the shipping industry is now facing, and says “I cannot stress strongly enough to my colleagues in the industry that this is already happening as we speak. The profound change in the way ships must be built, operated and fuelled will impact every shipowner on the planet. Investment decisions need to be reassessed, designs need change and business models will be forever impacted.”

Mr Schües continues “Climate change affects all of us and serves as a reminder that actions to limit our emissions must be taken urgently. BIMCO is grateful to the IMO member states for setting out in clear terms the pathway the shipping industry needs to follow in order to transition each and every ship in the world fleet to a net-zero GHG emission future.”

International Chamber of Shipping (Simon Bennett, ICES Deputy Secretary General)

“ICS greatly welcomes the ambitious agreement reached by governments at IMO today for shipping to achieve net zero emissions ‘by or around 2050’, in line with the Paris Agreement and the commitment made by the shipping industry at COP 26 in Glasgow back in 2021. This historic IMO agreement gives a very strong signal to ship operators and, most importantly, to energy producers who must now urgently supply zero GHG marine fuels in very large quantities if such a rapid transition is to be possible.

“The checkpoints agreed for 2030 and 2040 are particularly ambitious. The industry will do everything possible to achieve these goals including the 70 to 80 percent absolute reduction of GHG emissions now demanded of the entire global shipping sector by 2040. But this can only be achieved if IMO rapidly agrees to a global levy on ships’ GHG emissions to support a ‘fund and reward’ mechanism, as proposed by the industry. We urgently need to reduce the cost gap between conventional and alternative marine fuels and incentivise the production and uptake of new fuels at the scale now required to meet this accelerated transition. 2040 is less than 17 years away and the availability of zero GHG marine fuels today is virtually zero.

“It is very positive that a majority of governments now support a levy for shipping involving flat rate contributions by ships per tonne of GHG emitted to an IMO fund to expedite a rapid transition. The ICS ‘fund and reward’ proposal remains firmly on the table as a deliverable solution and will now be subject to a comprehensive impact assessment by UNCTAD to be completed by early next year, so that an economic measure can be adopted in 2025. This will be vital it we are to reach a take-off point by 2030 for the use of new fuels to achieve the extremally ambitious goal which IMO has now set for 2040.

“ICS is confident that this economic impact assessment will demonstrate that the ‘fund and reward’ proposal, or something similar, is the only practical way forward if the ambitious GHG reduction targets agreed by IMO this week are to remain realistic and achievable.

“This week’s agreement is historic for our industry and sends a very strong message that the maritime sector is serious about achieving net zero and addressing dangerous climate change in line with the Paris Agreement.”

UK Chamber of Shipping

“We have been clear that a target of net zero by 2050 is important and welcome the progress towards this increased level of ambition.

“It is vital though that economic and technical measures are brought in to help deliver both the end goal and interim targets for 2030 and 2040 as without them emissions reduction targets will not be achieved. Nations, through the IMO, must now work quickly to complete impact assessments and agree on the measures to reduce the emission intensity of fuels and place a price on carbon so they can be brought forward as soon as possible.”

Global Maritime Forum (Johannah Christensen, CEO)

“Today, at MEPC80, the IMO member states had the historical opportunity to adopt an ambitious, Paris Agreement-aligned greenhouse gas emissions strategy that would enable shipping’s full decarbonisation by at least 2050. It’s a remarkable improvement that the revised GHG strategy now aims to achieve net-zero emissions by or around 2050, and the introduction of indicative 2030 and 2040 checkpoints for emissions reductions sends an important signal to governments and industry. However, the revised strategy falls short to provide the necessary clarity and strong commitments for a just and equitable Paris Agreement-aligned transition.

“The shipping industry is ready for a full decarbonisation and is in fact, taking concrete steps towards achieving this goal. The Global Maritime Forum and its flagship initiative, the Getting to Zero Coalition, firmly believe that as a next step, the IMO must develop ambitious and rigorous policy measures, for example, introduce a levy on the emissions, to more closely align the shipping industry with the goals of the Paris Agreement, and create attractive incentives for companies to invest in zero-emission fuels and vessels.”

Environmental Defense Fund

“The shipping sector must do its fair share in the global fight against climate change and dramatically reduce the use of fossil fuels. We need to ensure that practical tools are developed in the next two years to do more to protect our ecosystems and communities – especially those at greater risk of health impacts and extreme weather – and spur a thriving maritime industry.” -Fred Krupp, President

“Member States at the International Maritime Organization showed they are willing to steer the shipping sector towards a clean future, but the 2023 Strategy is not in line with the 1.5 degree Celsius temperature goal of the Paris Agreement. The intermediate checkpoints are not strong enough to deliver the necessary emissions reductions and the language around the deadline for phasing out emissions is ambiguous.

“The next two years will be crucial for the United Nations agency to develop robust mechanisms to eliminate emissions from ships in a manner that protects the environment and communities, and that delivers rapid and effective decarbonisation beyond the ambition agreed upon today. Member States must work together to get the sector closer to aligning with the Paris Agreement, and to set the standard for other hard-to-abate sectors to follow. -Marie Cabbia Hubatova, Director, Global Shipping

More Reactions:

John Maggs, Clean Shipping Coalition: “There is no excuse for this wish and a prayer agreement. They knew what the science required, and that a 50% cut in emissions by 2030 was both possible and affordable. Instead the level of ambition agreed is far short of what is needed to be sure of keeping global heating below 1.5ºC and the language seemingly contrived to be vague and non-committal. The most vulnerable put up an admirable fight for high ambition and significantly improved the agreement but we are still a long way from the IMO treating the climate crisis with the urgency that it deserves and that the public demands.”

Faig Abbasov, Transport & Environment: “Aside from FIFA, it’s hard to think of an international organisation more useless than the IMO. This week’s climate talks were reminiscent of rearranging the deckchairs on a sinking ship. The IMO had the opportunity to set an unambiguous and clear course towards the 1.5ºC temperature goal, but all it came up with is a wishy-washy compromise. Fortunately, states like the US, UK and the EU don’t have to wait for China, Brazil and Saudi Arabia to act. Ambitious national policies and green shipping lanes can have a global impact. It’s time to think globally, act locally.”

Lucy Gilliam, Seas At Risk: “There is a real sinking feeling in the IMO. This agreement does not address the climate crisis or meet 1.5 limits. In typical IMO fashion there was delay tactics in working groups while the real inaction happened behind closed doors where many were excluded until the final hour and in front of a near ultimatum. The Pacific’s brought it back from the brink. But let’s be clear that this was not transparent, just or equitable and it is reflected in the result reached. What’s especially egregious is that we have the know-how to tackle this crisis. We also know that action will be far cheaper than inaction! The solutions exist yet once again IMO is failing to act with the urgency that dealing with the climate crisis requires. Another example to add to our recently published shipping SOS report which catalogues 50 years of failure to address the environmental impact of shipping. We will need others to step up and man the lifeboats if we are to shift and rescue a 1.5 aligned course”

Delaine McCullough, Ocean Conservancy: The climate emergency demands an international response, but the IMO’s struggle to set a GHG Strategy this week that adequately responds to the climate emergency raises questions of whether the organisation ultimately is up for the task. While the new GHG strategy nearly doubles the long-term ambition over the initial 2018 strategy, the checkpoints for 2030 and 2040 that were finally agreed to fall short of what is needed to ensure a warming limit of 1.5C. Thankfully, the Marshall Islands, Vanuatu and other small island states were able to secure stronger checkpoints, but the IMO must do better and others will need to step in. We now more than ever need immediate reductions and forceful national and regional policies and investments to keep us on a 1.5C route.”

Madeline Rose, Pacific Environment: “Nations failed this week to put the global shipping industry on a credible 1.5oC decarbonization pathway. While the inclusion of 2030 and 2040 emissions reduction targets for shipping is not insignificant — and we commend the Republic of Marshall Islands and Vanuatu for their tireless diplomacy to hold them — this Strategy will see the shipping industry exhaust its 1.5oC carbon budget by 2032. Fortunately, major maritime nations, ports, and companies can still act to fully decarbonize ocean shipping by 2040 – and that’s what we’ll be pushing them to do.”

Daniele Rao, Carbon Market Watch: “The way the International Maritime Organisation has watered down its climate ambition will sink the shipping sector’s chances of meeting its Paris Agreement commitments. Due to this failure, we need ambitious countries and blocs to chart their own course and set carbon levies at national and regional level of at least $100 per tonne of greenhouse gas emissions.”

Opportunity Green

“We are grateful for the immensely hard work of the Pacific Island nations and other ambitious Member States […] Every fraction of a degree is of crucial importance, and we need to continue to work to decarbonise international shipping in a just and equitable manner ASAP.” -Ana Laranjeira, Shipping Manager

Nautilus International (Mark Dickinson, General Secretary)

“This agreement is a significant step in the right direction for regulating greenhouse gas emissions within shipping, a crucial component of the action against climate change.

“We are pleased to see several mentions of the need for a just transition within the adopted strategy, but further urgent action is needed. The race to develop alternative fuels and new technologies will have a significant impact on the working lives of those onboard and respect for the voice of maritime professionals is key to delivering a just and equitable transition.

“It is imperative that alongside targets to reduce greenhouse gas emissions there is a global effort to ensure a transition that is just and equitable by future proofing skills and training, ensuring there are no compromises in safety and protecting and enhancing jobs, pay and conditions.

“This transition must be more than just technological or alternative fuels, it offers an opportunity to build a maritime industry fit for the future that truly values the work and dedication of maritime professionals – the lifeblood of the global economy.”

International Association of Ports and Harbors (Patrick Verhoeven, IAPH Managing Director)

“IAPH has closely followed the intersessionals running up to MEPC80 as well as the committee meeting itself, and submitted a call with others for an economic measure which would close the gap in pricing between hydrocarbon and low and zero carbon fuels. Such a measure would also assist funding very necessary investments in research and development to accelerate the energy transition of shipping as well as potentially supporting the vital port infrastructure investments to guarantee the supply of those new fuels, particularly in developing countries who will otherwise be marginalised.

“In just under a fortnight I will be in Goa at the 14th Clean Energy Ministerial summit alongside the International Chamber of Shipping to support their Clean Energy Marine Hubs initiative which aims to de-risk investments and transform the maritime-energy supply chain in an equitable manner. IRENA estimates that around 50% of future low and zero carbon fuels produced for the world will need to be transported by ship from producing to importing countries. IAPH intends to play an integral role in providing support to ICS and governments to kickstart the investments in port infrastructure to close the gaps between fossil fuels and the new fuels not just to bunker ships, but to transport the new energy to future users.”