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Getting serious on climate change – progress on the shipping industry's efforts to reduce carbon emissions

10 September 2021

The maritime industry is responsible for 3% of global emissions, but critics say that it has been slow to tackle the problem and needs to make significant changes to reduce its environmental impact. Ahead of a new wave of climate negotiations, David Appleton looks at what has been achieved so far

The 26th UN Climate Change Conference of the Parties (COP26) is due to take place in Glasgow this November. Governments will be scrutinising the progress that the International Maritime Organization (IMO) has made towards decarbonising an industry that – if it were treated as a country – would be the world's sixth biggest carbon emitter.

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David Appleton, Nautilus professional and technical officer

Since the Paris Agreement was ratified in 2015, the IMO, which had historically been accused of dragging its feet on environmental issues, has stepped up its efforts to tackle climate change by reducing CO2 emissions from ships.

However, despite a clear change of emphasis, there are many who feel that the IMO is lacking the necessary urgency and ambition. 

With just weeks left for the IMO to convince world leaders that it is up to the job, and with the threat of local regulation looming, here is a rundown of what has been achieved so far.

 

IMO strategy on greenhouse gases 

In 2018, the IMO adopted an initial strategy on the reduction of greenhouse gases (GHG) from ships, setting out a vision which confirms the IMO's commitment to reducing emissions and to phasing them out as soon as possible.  

The strategy sets specific targets to reduce CO2 emissions per cargo work by at least 40% by 2030 and 70% by 2050 compared with 2008 levels, and to reduce total CO2 emissions from shipping by 50% by 2050. This should be followed by a total phasing out of greenhouse gases (including CO2) as soon as possible in the second half of this century. 

In order to achieve these targets, a number of short, medium and long term measures will be required. Discussions on short-term measures are due to conclude in 2023, mid-term measures in 2030 and long-term measures after 2030.  

Energy Efficiency Design Index  

Initially introduced in 2011, the Energy Efficiency Design Index (EEDI) is seen as one of the key tools that can be used to reduce emissions in the short term. The regulations set out phased reductions in new vessel CO2 emissions, which can be met by any means but are most often achieved by reducing vessel power.  

Phase three of the EEDI was planned to commence in 2025. However, recognising the need to take more urgent action to achieve the goals of the initial GHG strategy, it was agreed in 2019 to bring the entry into force forward to 2022 and increase the reduction rate for certain ship types from 30% to 50%. A potential phase four has also been proposed which would mandate further reductions.  

It has been pointed out that the formula used for calculating a ship's attained EEDI encourages designers to focus on reducing engine size and power at the expense of other possible solutions, which could result in dangerously underpowered ships.  

Dealing with existing vessels 

On 17 June 2021, the IMO adopted amendments to MARPOL Annex VI at MEPC 76. This introduced two new energy-saving initiatives which will enter into force in November 2022: the Energy Efficiency Existing Ship Index (EEXI) and the requirement to reduce operational carbon intensity through the Carbon Intensity Indicator (CII).  

The EEXI is a framework for determining the energy efficiency and CO2 emissions of in-service vessels over 400 GT. Adapted from the Energy Efficiency Design Index for newbuilds, the EEXI requires shipowners to assess and measure their ships' CO2 emissions by design against specific emission reduction factors for each vessel type. Owners can then implement technical measures to adjust their vessels' emissions to the required level.  

The CII requires in-service ships of over 5,000gt to quantify and report on carbon emissions from ongoing operations. The CII provides ship operators with the factor by which they must reduce carbon emissions annually to comply with regulations and ensure continuous improvement. Vessels will be rated on a five-tiered scale (from A to E) for performance. 

As with the EEDI, it is likely that the simplest method of showing compliance will be to reduce available engine power, adding to safety concerns regarding underpowered ships.  

Market-based measures 

As the IMO begins to look at the medium and long term measures needed to meet the GHG strategy, discussions have turned to so-called market-based measures (MBM) aimed at incentivising a move away from fossil fuels. Detailed discussions on a proposal to implement a $100 per tonne CO2 levy will be held at the IMO's intersessional working group on GHG this October. 

Dutch shipowners state emissions position

Along with many other maritime nations, the Netherlands has been pressing shipowners to meet the IMO's objectives on emissions. 

The Royal Association of Netherlands Shipowners (KVNR), which represents the industry, suggests that 'all stakeholders in the shipping industry take responsibility for – and contribute towards – the continued phase-out of CO2 emissions in the maritime sector' to meet the targets.  

Charterers and shippers determine how efficiently a ship operates, designers and scientists must develop new-build vessels with alternative fuels and propulsion techniques, and shipowners and governments will need to invest substantial sums. In line with a proposal from international shipowners' associations, KNVR suggests the creation of an international maritime sustainability fund using a CO2 tax on shipping fuels.  

However, it does also comment that 'a proper balance between reducing CO2 emissions and associated costs' must be maintained (though this is partly to avoid driving business to other, more CO2-intensive transport modes. 

'Another key factor in the forthcoming period will be that the IMO takes consistent decisions concerning any technical, operational and/or economic issues that may arise. All factors must be carefully considered in order to prevent any market disruption.' 

KVNR is allowing shipowners to determine for themselves which measures (both technical and operational) they will take to meet the CO2 reduction targets, but warns that their efforts must be verifiable and enforceable. It also notes that safety standards should not be circumvented during the transition. 

In terms of action, the industry body is participating in talks with government, ports and shippers. It is also participating in a green methanol project. 


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