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Shipping nations rally behind short-term IMO emissions plan

Japan, China and Denmark are among the partnering countries that will push the International Maritime Organization later this year to impose a hybrid short-term GHG measure

Leading maritime nations have joined forces to promote a short-term greenhouse gas cutting measure that encompasses all of their previous proposals to the IMO

LEADING shipping nations have united on a short-term proposal to cut greenhouse gas emissions.

The proposal to the International Maritime Organization calls for a blended approach and is backed by 14 governments, including Japan, China, Norway, Denmark, Germany and Singapore.

Leading shipowner lobby group the International Chamber of Shipping is also a sponsor.

The coalition proposes “a combination of mandatory goal-based short-term measures where ships must comply with both operational and technical requirements on carbon intensity to achieve the levels of ambition in the Initial IMO GHG Strategy”, according to the document, seen by Lloyd’s List.

The proposal would see new broad energy efficiency requirements and individual annual carbon intensity targets, disclosures and rating obligations.

Short-term measures are primarily aimed at meeting the IMO’s target of reducing carbon intensity of ships by at least 40% by 2030.

The composition of the sponsoring partners is especially important considering that it consists of governments that until a few months ago were supporting different proposals on how to tackle greenhouse gases.

The united approach reflects the sense of urgency surrounding the issue.

The proposal also came a few days after the European Parliament agreed that shipping should be included in the European Union’s  Emissions Trading System, the bloc’s carbon market, starting in 2022, signalling that the IMO is under renewed pressure from the EU to take rapid decarbonisation action.

Governments have been unable to agree on a short-term measure despite discussing the issue since early 2019 and the postponement of IMO meetings earlier this year due to the coronavirus reinforced a willingness by the proponents of different measures to come to a faster agreement.

The new proposal was made to the intersessional working group on GHG emissions, which will meet virtually in mid-October. That meeting will be held behind closed doors ahead of the Marine Environment Protection Committee, the supreme IMO environmental authority that makes decisions on policy and regulations, which next meets in November.

The sponsors want the combination of proposed measures using elements from four proposals already tabled in 2020 but which have not been fully discussed or agreed on.

The key pillar is the Energy Efficiency Existing Ship Index (EEXI), originally proposed by Japan and later supported by Norway, Greece, Panama and others. A technical measure, it would impose specific energy efficiency targets on the existing fleet based on ship type and size, following the logic of the Energy Efficiency Design Index, which imposes these targets on newbuildings.

The sponsors also want to include the operational measure of a carbon intensity indicator (CII), which was proposed by Denmark, Germany and France and would force each vessel to have individual annual carbon intensity targets. Added to this is a carbon intensity rating mechanism proposal that had been suggested by China and Brazil.

They want to use this CII to rate each ship based on its performance compared to an agreed CII reference line. The IMO would then classify each ship annually in a category, using letter grading from A to E, based on its annual attained CII.

Finally, the sponsors want to utilise a different proposal by Greece, Japan and Norway, which aimed to strengthen the role of the Ship Energy Efficiency Management Plan that all ships are required to have.

Under the combined proposal, a ship’s SEEMP will include its required annual operational CII as well as a plan on how it will seek to attain that CII and a procedure for self-evaluation and improvement.

“Within a very limited timeframe, China, Denmark, France, Germany, Japan and Norway worked actively to find a proposal combining EEXI, SEEMP, CII and a rating mechanism,” the proposal said.

In spite of their involvement in some of the above proposals, Greece, Panama and Brazil are not co-sponsors of the combined proposal.

The different original positions among the various co-sponsors mean that they disagree on certain points and have laid out options for three specific issues for the intersessional meeting to decide.

The first difference is whether the CII ratings should apply to ships of 400 gross tonnes and above or ships of 5,000 gt and above.

The other two contentious points come with more parameters and options. The first concerns what should happen to ships with inferior CII ratings, especially those with D or E ratings. The second covers the options for calculating the reduction factor of the EEXI relative to the EEDI reference line, that determines how improved each newbuild type and size must be.

“The co-sponsors preferred not to increase the number of options to avoid complicating the content of the proposal. It is acknowledged that other options or combinations of options are conceivable,” the co-sponsors said.

If governments are able to agree and pick among these alternatives during the two upcoming environmental meetings, the MEPC could approve the proposed regulations.

That would be the first step and the next MEPC that will be held in 2021, would then have to adopt the proposal making it official regulation.

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