IMO revised GHG strategy gets mixed reactions

The International Maritime Organisation's (IMO) adoption of its revised greenhouse gas (GHG) strategy today has received mixed reactions from industry and nation states.

Member states welcomed having reached a consensus — overcoming deep divisions — and said this sent a clear message that the IMO is committed to decarbonisation.

But they remained conflicted on the compromises needed to reach the outcome.

Countries including South Korea, Australia, Ireland and Canada and most Pacific islands expressed disappointment in the ambition of the GHG emissions reductions targets, noting that they did not align with the 1.5C target stipulated by the Paris agreement. But they said today's agreement was only a starting point for decarbonising shipping: these targets could still play a part in maintaining the 1.5C temperature targets, said the Netherlands.

A delegate from Nauru performed a haka on the plenary floor during the delegation's statement, calling for agreement on further work.

"We fought tooth and nail for these numbers — they aren't perfect… we'll keep striving for an equitable 1.5 transition by this sector," said Belize's permanent representative to the UN Carlos Fuller.

China, India and many South American countries welcomed the outcome as practical. But they raised concerns over the pricing mechanism, as possibly punitive against countries dependent on shipping and distant from their markets, and the food security of net importers.

The pricing mechanism and fuels standards' form and content will be decided on and adopted by 2025. There are five proposals for the pricing mechanism — including a maritime levy, the most debated and opposed by China, India, and global south countries — with an impact assessment to be carried out on each proposal to inform the committee's decision on which to adopt.

A multi-donor voluntary fund, GHG TC-Trust Fund, has been established to support implementation of the revised strategy. The UK pledged £100,000 ($127,000), on top of £150,000 pledged during last week's intersessional working group, and the International Chamber of Shipping (ICS) pledged $100,000. Methodology and management for allocation is unclear.

But one guarantee was given: the fund will assist in the costs for delegations from distant countries, especially small island countries, to participate in the steering committee overseeing the impact assessment.

Member states also pointed to the need for the industry's co-operation to successfully implement any measures.

Profound change

Reactions from the shipping industry were equally mixed.

Bimco described the strategy as "groundbreaking", and said it will lead to "a profound change in the way ships must be built, operated and fuelled".

"Investment decisions need to be reassessed," said Bimco president Nikolaus Schues.

But others were less enthusiastic. Stena Bulk chief executive Erik Hanell expressed frustration at the "lower ambition."

"We can't afford to wait. It makes neither good sustainability sense nor good business sense to delay," he said. "The outcomes… all but solidify the prospect of the EU and US… pursuing their own strategies."

The International Chamber of Shipping (ICS) expressed its disappointment at what it said were inadequate targets. The World Shipping Council said "there is much to do… we are counting on the IMO member nations to press on with the important work of developing and adopting a robust regulatory framework that will make these fuels available and competitive."

Member states asked the industry to use the revised strategy as an impetus to start decarbonising. But industry bodies argued that shipping's response would be limited by a lack of clarity on economic and technical measures and a lack of direction to where it should turn its attentions. IMO secretary general Kitack Lim referred to this as a ''chicken and egg'' situation to be resolved through more co-operation in the industry. He pointed to increased spending on research and development of alternative fuels and ship engineering as the industry's willingness to invest in decarbonisation.

Some said 2025 would be too late for measures to be adopted, as any regulation would have to go into effect as soon as possible to reach the strategy's targets. If a measure were adopted in 2025, the earliest it could be implemented would be 2027, according to Lim.

Others were concerned by the emphasis on alternative fuels in decarbonising the sector, which may not be scalable or affordable enough to meet shipping's demand.

By Anya Fielding