Climate Change and International Shipping. Life in the slow lane, and life in the fast(er) lane.

The IMO’s Marine Environment Protection Committee (MEPC 76), meeting from 10 to 17 June 2021, adopted amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI that will require ships to reduce their greenhouse gas emissions.

All ships will be required to calculate their Energy Efficiency Existing Ship Index (EEXI) following technical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator (CII) and CII rating. Carbon intensity links the GHG emissions to the amount of cargo carried over distance travelled.

Ships will get a rating of their energy efficiency (A, B, C, D, E – where A is the best).  A ship rated D for three consecutive years, or E, is required to submit a corrective action plan, to show how the required index (C or above) would be achieved.

The amendments to MARPOL Annex VI (adopted in a consolidated revised Annex VI) are expected to enter into force on 1 November 2022, with the requirements for EEXI and CII certification coming into effect from 1 January 2023. The first annual reporting will be completed in 2023, with the first rating given in 2024.

A review clause requires the IMO to review the effectiveness of the implementation of the CII and EEXI requirements, by 1 January 2026 at the latest, and, if necessary, develop and adopt further amendments. 

The MEPC also adopted related guidelines to support the implementation of the amendments. 

The guidelines include the 2021 Guidelines on the operational carbon intensity reduction factors relative to reference lines (CII Reduction factor Guidelines, G3). This includes the required reduction (Z) factor, which is set at a rate, relative to 2019, of 11% by 2026 (about a 1.5% annual reduction, as opposed to the 7% annual reduction that would be needed for shipping to meet the goals of the Paris Agreement 2015). This would  be further strengthened after that date, taking into account the review of the measure and latest climate science.

These combined technical and operational measures, referred to as short term carbon intensity measures, are stated as being in line with the ambition of the Initial IMO GHG Strategy, which aims to reduce carbon intensity of international shipping by 40% by 2030, compared to 2008.

The MEPC adopted a work plan on the concrete way forward to make progress with candidate mid- and long-term measures including measures to incentivize the move away from fossil fuels to low- and zero-carbon fuels to achieve decarbonization of international shipping.

A proposal initially considered by MEPC suggested a mandatory levy of $100 per tonne carbon dioxide equivalent on heavy fuel oil will be further considered at the intersessional working group meeting in the context of the adopted workplan along with other proposals for mid-term measures. A proposal to establish an International Maritime Research Board, funded by a tax on oil fuel used by shipping and discussion will resume at the Committee’s next session.

The MEPC also adopted amendments to MARPOL Annex I (addition of a new regulation 43A) to introduce a prohibition on the use and carriage for use as fuel of heavy fuel oil (HFO) by ships in Arctic waters on and after 1 July 2024.

The prohibition will cover the use and carriage for use as fuel of oils having a density at 15°C higher than 900 kg/m3 or a kinematic viscosity at 50°C higher than 180 mm2/s. Ships engaged in securing the safety of ships, or in search and rescue operations, and ships dedicated to oil spill preparedness and response would be exempted. Ships which meet certain construction standards with regard to oil fuel tank protection would need to comply on and after 1 July 2029.

A Party to MARPOL with a coastline bordering Arctic waters may temporarily waive the requirements for ships flying its flag while operating in waters subject to that Party’s sovereignty or jurisdiction, up to 1 July 2029.

Meanwhile the EU is also active with plans regarding the reduction of carbon emissions from international shipping. Its plans for inclusion of international shipping in the emissions trading scheme were due to have been announced this month but will now be announced on July 14, Bastille Day, as part of its ‘Fit for 55’ package.

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