Critical phase of behind-the-scenes negotiations begins ahead of MEPC 83

Critical phase of behind-the-scenes negotiations begins ahead of MEPC 83

Industry associations and environmental organisations have welcomed progress at MEPC 82 in discussions on a potential global levy and fuel standard for shipping, but warned colossal work will be needed to bridge the gap between countries’ positions ahead of the planned approval of those measures at the next MEPC meeting in April.

‘The main developments at MEPC 82 have predominantly been happening informally’, summarised Edmund Hughes, who represents the International Bunker Industry Association (IBIA) at the International Maritime Organization (IMO).

Speaking with Bunkerspot, Hughes reported that some progress was achieved behind the scenes in finding convergence between countries’ views and consolidating proposals on a levy or contribution, but remarked that important differences will have to be resolved during intersessional discussions, both formal and informal. 

On Friday, MEPC 82 agreed to hold additional talks to accelerate the development of mid-term GHG measures before those measures are scheduled to be approved at the next MEPC meeting in April 2025. Delegates also approved a draft consolidated text containing different options to guide further discussions. Proposals currently on the table include a levy together with a fuel standard, or a fuel standard alone with a flexibility mechanism.

Hughes stressed that those negotiations will be complex and require political will from governments. ‘We’re dealing with countries trying to appraise the impact not just on shipping, but also on their economies and societies and trade, so it’s tied up to all sorts of geopolitical issues’, he said. ‘It really is in the hands of governments now. They all agreed the timeframe, and it’s now about trying to achieve that timeframe.’

A global levy ‘firmly on the table’

The International Chamber of Shipping (ICS), which represents shipowners and operators, welcomed the progress achieved at MEPC 82, but also warned that ‘much more work’ needs to be done by governments before the new framework is ready to be approved at the next MEPC meeting in April.

The ICS also hailed the growing support for a universal GHG contribution, which it described as ‘the best chance the shipping industry has to meet the IMO net zero GHG emissions target by or around 2050.’

‘We are pleased that the concept of a universal GHG contribution by ships, per tonne of CO2e emitted, remains firmly on the table at IMO. There is strong support for this from a clear majority of IMO Member States, which also control most of the world’s shipping tonnage’, the ICS said in a statement on Friday.

Calls for ambition and a fair transition

Opportunity Green, an environmental group based in London, welcomed the fact that MEPC 82 has seen more discussions about how funds from a potential global levy should be distributed.

The organisation’s Policy Officer for Climate Diplomacy, Blánaid Sheeran, hopes the next few months will see those conversations intensify, while ensuring that voices from developing countries are heard.

‘These intersessional meetings will be very important to inform the final design of the measures, and I hope efforts will continue to ensure broad and geographically representative participation in the decision making’, Sheeran told Bunkerspot. ‘We would like to see a distinct economic measure that sets an ambitious price and really prioritises a just and equitable transition in the way the revenues are disbursed and who they are disbursed to.’

This view is echoed by the US-based NGO Environmental Defense Fund (EDF), which points out that discussions at MEPC 82 raised wider questions about the consequences of a potential levy on issues such as food security and the cost of freight.

In an interview with Bunkerspot, Erica Morehouse, Senior Director of Just & Equitable Mission Engagement at EDF, advocated for a flat greenhouse gas contribution combined with a global fuel standard accounting for the full lifecycle of marine fuels. She emphasised that this approach creates an opportunity to level the playing field and redistribute revenue, which could be used in to improve food security or climate mitigation measures, for example.

‘It is important to look at other policy objectives and policy considerations that may intersect with the climate crisis. Food security doesn’t relate directly to how many greenhouse gases ships emit in the atmosphere, and yet putting a price on shipping might increase the price of food in some places, so we need to think about that carefully,’ Morehouse explained.

More urgency needed, says Smart Green Shipping

Meanwhile, Smart Green Shipping, a design and engineering company based in Scotland, has called on governments to adopt an energy-centric rather than a fuel-centric approach as they develop the new measures.

‘By the focus being on fuel, we have missed a wider opportunity to look at renewable energy and to look at efficiencies that would start to bring emissions down sooner’, the company’s CEO and Founder Diane Gilpin told Bunkerspot.

Gilpin also suggested that FuelEU, which incorporates emissions reductions factors for wind propulsion, could be used as a template to accelerate progress. She would like to see more urgency in discussions. ‘It’s just not going fast enough. We are facing a climate emergency,’ she said.

Under the Revised Strategy adopted by MEPC 80 last year, ‘mid-term’ economic and technical measures to reduce GHG emissions from shipping are scheduled to be approved at MEPC 83 in April 2025, before being formally adopted in October that same year for an entry into force in 2027.

Source: https://www.bunkerspot.com/global/63240-mepc-82-reactions-imo-climate-negotiations

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