Intersessional mulls policy mix needed to cut GHG from ships by 40% in just nine years
Over the summer members of IMO’s Intersessional Working Group on Greenhouse Gases (ISWG-GHG) gathered virtually to discuss potential short-term measures that would incentivise ship owners to get serious about reducing the carbon footprint of their vessels. A big focus of the talks was potential successors to today’s Energy Efficiency Design Index, or EEDI, and much rides on the decision.
Before delving into that it’s worth mentioning why this meeting took place at all. Like we all have, IMO has had to adapt to the Covid-19 world. As an organisation representing some 174 member States, this has proved a formidable task and it took the early and sensible decision of postponing nearly all official meetings until it had suitable infrastructure in place to let them take place virtually.
This special informal session was requested for 6-10 July to serve as virtual guinea-pig, allowing the executive to test the water as it were and evaluate how it’s new systems would enable future IMO meetings to take place with participants joining remotely. As such, the meeting covered only one agenda item – short-term measures – and no formal decisions were required.
So what happened? The goal was to let member States and NGOs swap notes and get up to speed on the latest technical and operational measures that show potential in cutting the carbon intensity of international shipping by at least 40% by 2030 – a deadline that is now only nine years away.
To say progress is urgent would be an understatement given the alarming findings of the 4th IMO Greenhouse Gas Study released this summer, which indicated that since 2012 GHG emissions from shipping have increased by almost 10% and, if nothing changes, are expected to continue increasing.
IMO will assess progress in reaching its decarbonisation targets – or as it prefers to call them ‘level of ambition’ – in two ways: firstly in terms of total annual CO2 emissions from international shipping, and secondly in terms of CO2 emissions per unit of transport work.
Today the only officially endorsed measurement instrument is the Energy Efficiency Design Index (EEDI). However, over the last couple of years as decarbonisation has come to the fore, a whole host of other metrics have been proposed, each with their own merits and limitations. These include EEOI (Energy Efficiency Operational Indicator), EVDI (Existing Vessel Design Index), EEXI (Energy Efficiency Existing Ship Index), and AER (Annual Efficiency Ratio).
Of the proposals so far submitted to the intersessional meeting and MEPC75 (scheduled for November), only the EEXI can be said to fall into the category of ‘technical efficiency’ improvements. A problem with technical efficiency improvements is that they can be self-defeating. By modifying an engine to make it more efficient means it costs less to run for a given output. That cost reduction may change the end-user’s behaviour as they seek to satisfy other goals. A consumer might purchase a larger car with a larger engine the next time they upgrade. A vessel-owner might decide to increase sailing speed. So after a short-lived drop in emissions, they rebound to their earlier level as people’s behaviour adjusts to the efficiency gain. This is known as Jevon’s Paradox.
The others can be classified as operational efficiency improvements. This latter group of the proposal can be further subdivided according to the level of obligation and according to prescriptiveness. Some proposals suggest that no action to a common or specified level of improvement in carbon intensity is needed. Others specify the level of action needed. For instance, some are essentially voluntary and give shipowners full discretion in setting the metrics and targets. Others are more prescriptive in what owners have to measure and report but stop short of setting mandatory targets. Two go the whole hog and specify mandatory targets.
On balance, IMarEST believes that only policies that set clear, unambiguous targets are likely to be capable of achieving the rates of GHG reduction required if IMO’s ambitions are to be met by the end of this decade.
IMarEST gave input as the group deliberated over which package of measures would have the greatest impact in reducing GHG emissions. Agreement still seems a long way off partly because analysing and predicting impacts is harder than it sounds. As shown above, measures can have unintended consequences, which may only become apparent over time. The task becomes even more taxing when the scenarios being considered involve multiple measures used in combination.
It doesn’t help that thus far many of the analyses produced to provide the rationale behind a particular measure are incompatible with one another. They employ different analytical techniques, make different starting assumptions, or consider the consequences in the context of different geographical regions. This variability in approach means like-for-like comparisons are out of the question. Furthermore, they sometimes use overly simplistic proxies to gauge how different stakeholders will react to a measure, for example, considering behavioural response solely in terms of vessel speed. This suggests a rather pressing need for a modelling framework that is higher resolution and allows for reasonable comparisons between different measures or combinations of measures, so that member States can be confident in the predicted outcomes and will not hesitate over more ambitious policy options.
At this stage there is support for EEXI (Energy Efficiency Existing Ship Index) to form part of the package that will eventually emerge. While member States averse to reducing carbon intensity maintain that EEXI alone will be sufficient to change behaviours, a mounting body of evidence indicates quite the opposite – that it doesn’t have enough firepower on its own to meet IMO’s ambitions. So what remains to be decided are the mandatory measure(s) that complement it. Three options currently sitting on the table:
- Low efficacy operational measure, no common targets, ships apply their own objectives, light modification of existing SEEMP
- Medium efficacy operational measure, common targets set and expected, but no enforcement
- High efficacy operational measure common targets set and expected, and enforcement if failure to achieve them
There is much riding on this decision as the chosen policy package will effectively become IMO’s main weapon in bringing about the 40% reduction goal within the decade. If the aim is off or if it doesn’t pack enough firepower, it will surely miss its target.
Building on the findings of the 4th IMO GHG study, IMarEST plans to contribute further evidence to support member States in their considerations, both at future meetings and in written submission – with a particular focus on applying an understanding of the historical drivers of carbon intensity to policies aimed at reducing it in the future.
The Intersessional Working Group will officially reconvene (virtually) for its 7th session on 19-23 October to work through the rest of its agenda. Items include developing a voluntary National Action Plan (NAP) and to consider proposals to spur uptake of alternative low-carbon and zero-carbon fuels.