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Shipping’s climate compromise keeps 1.5°C alive, for now

For all the vague and non-committal compromises, the IMO has managed to keep enough of what was needed in its revised greenhouse gas emissions strategy for progress to be possible. The devil remains in the detail yet to be agreed, but make no mistake — progress has been made

The IMO’s loosely worded climate targets fall short of keeping shipping aligned with the 1.5°C Paris Agreement temperature goal, but they are closer than most expected and keep alive the prospect of global technical and economic measures to come that could yet radically reduce the industry’s carbon output

THE International Maritime Organization has achieved this week what many thought politically impossible — a credible, if unfinished pathway to decarbonising shipping.

Much of the detail remains unanswered and the loosely worded, non-mandatory targets are not in line with the Intergovernmental Panel on Climate Change’s guidance on what is needed to meet the Paris Agreement 1.5°C temperature goal.

But they are significantly closer than most expected.

Despite the immediate outpouring of disapproval from those environmental lobby groups funded to rail against anything less than the most ambitious targets, no matter how politically credible, the IMO has retained its mandate to reduce shipping’s GHG emissions on a global basis.

“It’s a hard-reached compromise that nobody is really happy with,” said the delegate from Samoa — a country deeply vulnerable to climate change — neatly summing up the frustrating realities of the concessions that were necessary to get this landmark agreement over the line.

That all countries found consensus for a revised strategy was considered a milestone given how entrenched and deep divisions have been.

While significant achievements have been won, this is merely a skirmish in a long war ahead. The battleground now shifts from what the greenhouse reduction targets should be, to how they will be achieved.

Any hope of reaching the higher but non-binding interim emission goals for 2030 by 2040 depends on whether countries can find further, continued compromise, this time over the right economic measures or pricing mechanisms to fund them.

These measures must be signed off by 2025, one of the few firm deadlines contained in the revised strategy on greenhouse gas emissions reductions adopted today.

A “comprehensive impact assessment” now begins into a range of proposals, known as mid-term measures.

They span from the shipping industry’s fund-and-reward scheme and China’s “sustainability funding and reward” plan, to the Pacific Islands’ universal greenhouse gas levy.

The timetable — an interim report will be presented by spring 2024, finalised within three months and approved the following year — is uncharacteristically swift.

The next hurdle to ambitions is already within sight.

Countries including China, Brazil, and others in Latin America this week flagged firm opposition on the plenary floor to any universal carbon tax or flat-rate levy.

Pacific Island nations countered with a mid-week press conference denouncing the “disinformation campaign”.

Any market-based levy to fund the energy transition in shipping needs to be combined with global fuel standards along with a price on emissions to increase the cost of fossil fuels, with a system for using and distributing revenues.

Although the agreement lacks strict GHG emission reduction targets, it still sends the necessary demand signals from the shipping industry for alternative fuel production owing to its ambitious indicative checkpoint for 2040.

Developed countries told the IMO they want mid-term measures entering into force by 2027 but the text appears open-ended.

Sign-off by 2025 implies they could begin “as early as 2027”, providing space for further haggling over the coming 24 months.

Other important details include the fact that the final text now talks about greenhouse gas emissions being assessed on a well-to-wake (full lifecycle of the fuel) basis — an important concession when it comes to the detailed discussions that will follow.

Compared to the initial strategy, agreed in 2018, the deal provides clearer framing around lifecycle GHG reductions, inclusive of methane (CH4) and nitrous oxide (N2O) emissions.

Other concessions are buried in the text. Non-binding goals for 2030 now includes “other energy sources” in a 5% target (“striving for 10%”) for the uptake of zero or near-zero emission reduction technologies.

That is a winner for wind technologies and moves the IMO closer to goals set by the EU27 to reduce the greenhouse gas intensity of fuels incorporated in the FuelEU Maritime regulations.

It is also important to note that this newly revised version of shipping’s decarbonisation strategy now envisions a Just and Equitable transition, an entirely absent concept in the Initial Strategy.

Still, the IMO remains an easy target and some seem determined to paint today’s landmark deal as a failure.

It is not.

The watering down of 2030 and 2040 interim targets into “indicative checkpoints” and the net-zero goal “by around 2050” acknowledges the realities and limitations of multilateral processes.

Yes, the strategy is not aligned with the Paris Agreement goal to keep global warming within 1.5°C. But as many delegates argued on Friday, “it keeps 1.5°C within reach”.

It was always anticipated that further work on the industry’s GHG reduction pathway would be needed when this strategy is revised in 2028 — today’s agreement keeps that in play and amounts to a strong set of signals to both the energy and shipping sectors that change is afoot and demand for zero carbon fuels is coming.

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