In fact, following the UN’s climate summit, COP26, in Glasgow last year, the IMO’s Marine Environment Protection Committee (MEPC) agreed past November to initiate the revision process of its 2018 adopted Initial IMO Greenhouse Gas Strategy and to increase the ambition in that process. The IMO’s MEPC will meet again next June and in December 2022 and will see governments discuss the GHG reduction targets for global shipping. By spring 2023 IMO will release its revised decarbonisation strategy.
According to Roel, the IMO is currently receiving proposals on how to make the decarbonisation target more ambitious while ensuring that none of its member states is left behind. In those proposals for the revised strategy we can see suggestions to (1) provide legal certainty for first movers –towards decarbonisation– so that they do not end up with stranded assets, which in turn would reassure them of their ROI regarding energy transition; (2) help to bridge the current price gap between fossil and alternative fuels; and (3) make sure that for certain types of trade, routes, or ship-sizes and types there is sufficient flexibility in the new regulatory framework for them to get on board the journey to decarbonisation. These measures should further incentivize the energy transition through inclusion, and tackling climate change transversally across the industry, seeking a uniformized decarbonisation process. Furthermore, and considering the growing relevance of ESG metrics across the sector, these measures hold the potential for not only boosting energy transition, but also sustainable investment in the next generation of zero-carbon vessels and in much needed port infrastructure to serve these.
To direct those investments to the alternative fuels with the lowest overall climate impact, the IMO is currently also working on the ‘Lifecycle Greenhouse Assessment Guidelines’ that will help to identify and measure carbon footprint across the entire scope of alternative fuels, which in turn should allow decision-makers to choose the most suitable option.
In the medium-term, the IMO is looking at developing market-based measures that will introduce a carbon price on CO2 emissions from shipping and in that way incentivize the use of low-carbon fuels that will be undoubtedly be substantially more expensive, at least in the short term. Any future carbon revenues controlled by the IMO could be used to drive resources towards developing countries and small island states to support them with either climate adaption and/or climate mitigation projects, or even the development of sustainable port infrastructure. Further to this, and in the light of the ongoing energy transition, the IMO is also supporting developing countries with the potential to become production hubs for alternative renewable fuels by facilitating the building of relations between countries and industry stakeholders.