IMO policies & action
What is the International Maritime Organisation?
The IMO is a UN special agency composed of 174 member states, and is responsible for preventing shipping pollution. While the Kyoto Protocol stipulated that developed countries should reduce their international shipping emissions by working through the IMO, the Paris Agreement was silent on the matter and provides that countries are to set “economy-wide” reduction targets, which implies that emissions from international bunkers should be included in government climate targets under the Paris Agreement.
The IMO consists of an Assembly, a Council - the executive body - and five committees, including the Marine Environment Protection Committee (MEPC).
The MEPC deals with issues related to preventing pollution from ships, including GHG emissions and energy efficiency measures. The MEPC adopts resolutions on these issues and establishes working groups such as the Working Group on Reduction of GHG Emissions from Ships which reports to the plenary of the Committee. member States can submit proposals to the MEPC, which is open to NGOs and industry observers on a consultative status. MEPC decisions are taking by voting by simple majority, only member States vote (Hayer, 2016; IMO, 2019d).
Emissions projections under current policies
International shipping accounted for about 2% of global GHG emissions in 2018 and represents the lion’s share of total shipping emissions (IMO - MEPC, 2020a).
In its 4th GHG study, the IMO provides a wide range of emissions projections through 2050, ranging from 90% - 130% above 2008 levels, assuming that no new policies are included. We thus assume that these scenarios include existing policies. All of the scenarios indicate a sharp increase in emissions, contrary to the peak and decline that will be necessary for Paris compatibility and the aim of the IMO initial strategy.
We use the maximum and minimum of the three scenarios selected by the 4th IMO study as the range for our current policy projection based on the logistic-model for projecting transport work (SSP2_RCP2.6_L, SSP4_RCP2.6_L, OECD_RCP2.6_L). Our projections, including the effects of the COVID-19 pandemic (see below), result in 1025-4053 MtCO2 in 2030 and 1210-1350 MtCO2 in 2050. Emissions would need to be at least 449 MtCO2 and 114 MtCO2 in those years to be compatible with a 1.5°C pathway from a least-cost perspective.
Vessel vs Voyage approaches
While the IMO 4th GHG study shows a high range in emissions projections, this uncertainty is even more accentuated by a large range in estimated historical emissions. In its 4th GHG study, the IMO introduced a new methodology to measure historical emissions – voyage-based – which shows a close to 200 MtCO2e difference (between 142MtCO2e and 183 MtCO2 difference) compared to the usually used vessel-based method.
While the voyage-based approach is closer to the IPCC reporting guidelines, it is intrinsically linked to the method that countries will apply in measuring their domestic maritime emissions to avoid emissions not being counted in either of the inventories. There is therefore a material risk that the difference in GHG emissions will disappear in an accounting loophole. It is unclear if the IMO will fully transition to the new voyage-based methodology and update its targets using these new estimates or keep the baseline as evaluated in its 3rd IMO GHG study. (See the assumptions section).
Sharp increase of methane and short-lived climate pollutants
CO2 emissions from international shipping accounted for about 70-87% of all CO2 emissions from the shipping sector in 2018 depending on accounting methodology (voyage-based or vessel-based) (IMO - MEPC, 2020a). When considering other climate pollutants such as non-greenhouse gases, black carbon is the second largest contributor in emissions and accounted for around 7% of international shipping emissions, including GHG and black carbon emissions, in 2018 (voyage-based) (IMO - MEPC, 2020a).
Black carbon emissions estimates were included for the first time in the 4th GHG study. The study shows that black carbon emissions have risen by 12% between 2012 and 2018, mostly from the use of high-emitting heavy fuel oil (HFO). Black Carbon emitted by HFO is particularly critical in the Arctic because it directly warms the Arctic atmosphere through changes in surface albedo when BC is deposited on snow and sea ice and by absorbing solar radiation in the atmosphere that would otherwise have been reflected into the space by the icy surfaces of this region. This warming effect may be up to five times greater than compared to black carbon emissions emitted in lower latitudes (HFO-Free Arctic, 2016; Sand et al., 2013).
Also of concern are new sulphur limit regulations that have been in force since January 2020. Implementing these regulations will lead to a switch from HFO to the so-called ‘Very Low Sulfur Fuel Oil’, which has been found to emit 10% to 85% more black carbon than HFO (Climate Change News, 2020) (IMO, 2019e). Limitation on black carbon emissions will need to be put in place to counteract this effect.
The 4th GHG study also shows that there has been a sharp increase in methane emissions, which rose by 150% between 2012-2018 (IMO - MEPC, 2020a). The increase is mostly driven by the greater use of Liquified Natural Gas (LNG) fueled engines. LNG is not an option to support the transition to alternative energy sources. Studies have shown that the adoption of LNG could actually increase international shipping’s climate impact when the whole life cycle of all GHG gases are taken into account (Lowell & Bradley, 2013; Pavlenko et al., 2020a). Investment in LNG facilities is growing and could lead to stranded assets or perpetuate a carbon “lock-in” effect as ships and onshore LNG infrastructure will make it more difficult to transition to low-carbon fuel.
Minimal lasting impact from the pandemic likely
The 4th GHG study did not consider the impact of the COVID-19 pandemic in any of its scenarios. It noted that while emissions would be significantly lower in 2020 and 2021 and there was uncertainty around the nature and speed of the recovery, it anticipated that any lasting impact from the pandemic would be small and within the uncertainty range of the scenarios considered.
In this update, we have estimated the impact of the pandemic on 2020 historic emissions and the emissions trajectory over the next couple of years, using data on world merchandise trade levels from the WTO and international tourist arrivals data from the UN World Tourism Organization as proxies for the extent of emission reductions (see assumptions for details). The actual drop in merchandise trade volume in 2020 was lower than originally anticipated by the WTO and is anticipated to rebound in 2021 and continue to grow in 2022. As a result, our updated projections are slightly higher in 2030 and 2050 than last year’s assessment.
The IMO Initial Strategy to reduce GHG emissions in international shipping was published in 2018 and is set to be reviewed in 2023. The Strategy set several emission reductions targets: reduce the CO2 intensity of international shipping by at least 40% and 70% from 2008 levels by 2030 and 2050, respectively, and to reduce absolute GHG emissions at least 50% below 2008 levels by 2050 (see target section).
To implement its strategy, the IMO has so far introduced few policy instruments, which lack ambition in terms of targets, scope, and timeline for implementation. In 2019, the IMO tightened its energy efficiency design requirements to ship owners for new ships (EEDI) regulating the amount of CO2 emissions related to installed engine power, transport capacity and ship speed (Bureau Veritas, 2021). Based on the EEDI approach, in November 2019, the IMO member states approved draft new mandatory regulations to cut the carbon intensity of existing ships (EEXI), which will likely enter into force in January 2023. EEXI was proposed by Japan and supported by Norway, United Arab Emirates, Greece and Panama. The IMO failed to pass these new mandatory regulations at its November 2020 meeting, but adopted them at the June 2021 meeting.
De facto, newly built ships which comply with EEDI are also compliant with the EEXI. While this measure would cover more than half of international shipping emissions from 2008, the estimated impact in reducing emissions by 2030 is marginal – less than 2% compared to if no measure were applied, mainly due to a continued low speed applied by the operators (ICCT, 2020). The IMO will need to make further efforts to drive emissions reductions to meet its carbon intensity target by 2030.
In June 2021, IMO member states were scheduled to agree the metric to use in the measurement of its carbon intensity target. Two options are on the table, a supply-based metric (AER) and a demand-based metric (EEOI). While it is estimated that the former would barely allow emissions reductions (-3% by 2030 compared to 2008 levels) the latter would allow actually an increase of emissions in the current decade by around 13% (ICCT, 2021). The committee members agreed – unsurprisingly – on a weak annual carbon intensity reduction rate of 2%, allowing emissions to grow between 2030 - 2018 instead of peaking and declining in the near future, as required by Paris Agreement compatible pathways (Safety4Sea, 2021).
2019 saw the approval by the IMO member states of the heavily-criticized draft ban on the use of HFO in the Arctic, fully adopted at the June 2021 meeting. Not only its entry to force has been postponed to five years later (by 2029), but it would still allow 74% of the Arctic shipping activities to continue as business-as-usual (Ocean Conservancy, 2020). A major weakening of the policy’s effectiveness as 68% of the fuel consumed come from just five of the Arctic Nations (Russia, United-States, Canada, Norway, and Denmark) (Comer et al., 2017).
Under the urgency of reducing global emissions, the IMO needs to develop and implement mitigation measures at a faster pace.
Timeline of implemented measures through the IMO:
- MARPOL (International Convention for the Prevention of Pollution from Ships) governs ship pollution from operational or accidental measures. Annex VI to the MARPOL Convention regulates air pollution, including GHG emissions, and was adopted in 2005 (IMO, 2018; MARPOL Training Institute, 2005).
- In 2011, two energy efficiency measures were made mandatory – the only regulations that require efficiency improvement from ships: the Energy Efficiency Design Index (EEDI) for new ships and the Ship Energy Efficiency Management Plan (SEEMP) for all ships. The EEDI requires a minimum energy efficiency level per activity to be tightened up in phases every five years, currently being in phase two. Each phase defines a reduction factor for the EEDI to comply with, increasing at each phase, the last phase being phase three (IMO, 2017; MARPOL ANNEX VI, 2013).
- In March 2018, the IMO Data Collection System (DCS) on fuel consumption for ships entered into force. One month later, the MEPC adopted the “Initial IMO Strategy” to reduce GHG emissions from ships (Resolution MEPC.304(72)). It outlines three main goals (see target section) and includes a list of “candidate” measures to be considered to reach these targets and a timeline for the implementation of these measures which need to be made mandatory under an IMO convention before they become legally binding.
- In May 2019, the MEPC approved draft amendments to MARPOL Annex VI for more stringent energy efficiency existing requirements by increasing the energy efficiency reduction rate for newly built ships (transition to phase 3 of the EEDI) and bringing forward the deadline for compliance from 2025 to 2022 (IMO, 2019a; UNCTAD, 2019). It also adopted a resolution to encourage voluntary cooperation between ports and shipping sectors to contribute to the reduction of GHG emissions from shipping (IMO, 2019b).
- In November 2020, the MEPC approved draft amendments to MARPOL Annex VI for regulating energy efficiency for existing ships (EEXI) and adopted more stringent energy efficiency requirement for newly built ships (strengthened EEDI) as per drafts approved by member states at the previous MEPC meeting in May 2019 (IMO - MEPC, 2020b; IMO, 2020). The committee approved heavily criticised draft amendments on the use of HFO by ships in Arctic waters (Ocean Conservancy, 2020).
- In June 2021, member states fully adopted the drafts amendments to MARPOL for regulating energy efficiency of ships (EEXI), which were approved at the previous session in November 2020. The session saw the adoption of the ban as well of use of HFO by ships in Arctic waters. Finally, member states decided on carbon intensity yearly reduction rate of 2% between 2019-2030 to meet its carbon intensity target by 2030. This is close to a business-as-usual trajectory – see above for more details.