The International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC 72) adopted on 13 April 2018 an initial strategy, a framework for its 173 member countries, which is likely to be a starting point for greenhouse gas (GHG) emission1 reduction targets and guiding principles for the shipping industry to become part of the transition to low-carbon future.
International shipping will reduce greenhouse gas emissions
International shipping, together with the aviation sector, were not yet covered by the Paris Climate Agreement. Reducing greenhouse gas emissions from shipping is crucial to tackling climate change. Maritime transport is currently responsible for 3% of global emissions, but its emissions are projected to grow by up to 250 percent by 2050. A continued increase in international marine transport without any significant gains in energy efficiency may result in shipping being responsible for 6% of the world’s GHG emissions by 2020 and 15% by 2050.
With the current global trend towards a reduction of air emissions from all sectors, the shipping industry was experiencing increased pressure from stakeholders in general, and regulators in particular, to tackle its emissions and improve its energy efficiency.
The strategy includes ambitious carbon reduction targets up to 2050 aiming for achieving carbon-free transportation at sea within this century:
- Target 1: carbon intensity of ships to decline through implementation of further phases of the energy efficiency design index (EEDI) for new ships
aiming to strengthen the energy efficiency design requirements for ships with the percentage improvement for each phase to be determined for each ship type, as appropriate;
- Target 2: carbon intensity of international shipping to decline through reduction of CO2 emissions per transport by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008;
- Target 3: GHG emissions from international shipping to peak as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008, while pursuing efforts towards phasing them out by the end of the century.
The International shipping industry, INTERTANKO and several national shipowners associations have welcomed this decision. Howev er, it must be said that, with regard to the regulations on GHG emissions, the policy mechanism supported by the EU, namely the monitoring, reporting and verification (MRV)/cap-and-trade system, will have impacts on the financial performance of companies. The main consequences will be an increase in operational costs (cash flow risks) and, depending on the legislation, an increase in capital costs.
1 Under the GHG Protocol, six gases are categorized as greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorooctane sulphonate (PFCs), and sulphur hexafluoride (SF6). Carbon dioxide (CO2): CO2 is the GHG most relevant to the shipping industry. Maritime transport emits around 1000 million tons of CO2 annually and is responsible for about 3% of global greenhouse gas emissions (3rdIMO GHG study).