GREEN HOUSE GAS EMISSION

July 2009: Marine Environment Protection Committee (MEPC) 59th session

The Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) agreed to disseminate a package of interim and voluntary technical and operational measures to reduce greenhouse gas (GHG) emissions from international shipping; and also agreed a work plan for further consideration, at future meetings, of proposed market-based instruments to provide incentives for the shipping industry.

The agreed measures are intended to be used for trial purposes until the Committee's sixtieth session (MEPC 60) in March 2010, when they will be refined, as necessary, with a view to facilitating decisions on their scope of application and enactment. The measures include:

· interim guidelines on the method of calculation, and voluntary verification, of the Energy Efficiency Design Index for new ships, which is intended to stimulate innovation and technical development of all the elements influencing the energy efficiency of a ship from its design phase; and

· guidance on the development of a Ship Energy Efficiency Management Plan, for new and existing ships, which incorporates best practices for the fuel efficient operation of ships; as well as guidelines for voluntary use of the Ship Energy Efficiency Operational Indicator for new and existing ships, which enables operators to measure the fuel efficiency of a ship.

Market-based instruments

The Committee held an in-depth discussion on market-based instruments and agreed a work plan for its further consideration of the topic, as of its next session (MEPC 60, March 2010), to build on discussions and submissions to date, taking into account also relevant outcomes of the climate change conference (COP 15) that the United Nations is to convene in Copenhagen in December 2009. Such instruments would have purposes such as: climate change mitigation and adaptation activities; research and development; offsetting of emissions; and serving as an incentive for the industry to invest in more fuel-efficient technologies.

The Committee noted that there was a general preference for the greater part of any funds generated by a market-based instrument under the auspices of IMO to be used for climate change purposes in developing countries through existing or new funding mechanisms under the United Nations Framework Convention on Climate Change (UNFCCC) or other international organizations.

Report to COP 15

The outcome of the MEPC on GHG emissions from ships will be reported to COP 15, which will consider a successor instrument to the Kyoto Protocol to the UNFCCC.

The Committee agreed that any regulatory scheme applied to GHG emissions from international shipping should be developed and enacted by IMO as the most competent international body.

Speaking at the close of the MEPC, IMO Secretary-General Efthimios E. Mitropoulos congratulated delegates for driving forward the Committee's agreed action plan on greenhouse gas emissions from ships, which "deserves to be recognized as compelling proof that IMO can, indeed, be entrusted with the regulation of international shipping on the issue of climatic change - an unequivocal message that needs to be heard, and fully understood, all over the globe. He went on to urge delegates to promote the successful outcome of the session, by briefing their colleagues and, through them, the competent Ministers in their home countries (e.g. of Transport, Mercantile Marine, Environment and Foreign Affairs), in particular those who will participate in COP 15, and by publicizing it widely among all concerned so that "the complexities of this most international of all industries are duly taken into account when shaping official policies and positions on the issue at hand - both at Copenhagen and at the post-Copenhagen rounds of consultations at IMO."

Mr. Mitropoulos reiterated his belief that "the time for apportioning blame as to who is responsible for the state of the planet has passed. Now it is time for action. Developed and developing countries, industrialized and emerging economies alike are left with no option other than to get together and, together, work out solutions that will serve well the good cause of reversing the route to planet destruction."

Greenhouse gas study 2009

The MEPC was assisted in its deliberations by the outcome of the Second IMO GHG Study on greenhouse gas emissions from ships, 2009, which is the most comprehensive and authoritative assessment of greenhouse gas emissions from ships engaged in international trade.

The Study estimated that ships engaged in international trade in 2007 contributed about 2.7 per cent of the world's anthropogenic CO2 emissions and also states that emission reductions are feasible through technical and operational measures as well as through the introduction of market-based reduction mechanisms.

In the absence of global policies to control greenhouse gas emissions from international shipping, the emissions may increase by between 150 and 250 percent by the year 2050 due to the expected continued growth in international seaborne trade.

March 2009: Second intersessional meeting of IMO's Working Group on Greenhouse Gas Emissions (GHG) from Ships

Major progress was made in developing measures to enhance energy efficiency in international shipping, and thereby reduce greenhouse gas emissions, when the second intersessional meeting of IMO's Working Group on Greenhouse Gas Emissions (GHG) from Ships was held at IMO's London headquarters from 9 to 13 March 2009.

The meeting will report to IMO's Marine Environment Protection Committee (MEPC) when it meets for its 59th session in July.

The working group, which was attended by more than 200 experts from all over the world, concentrated on the technical and operational measures to reduce GHG from ships - two of the three pillars of IMO's GHG work. The third pillar, possible market-based instruments, will be debated in depth at MEPC 59.

The working group considered a large number of papers from Member Governments and observer organisations on how to increase fuel efficiency in the world fleet.

The main focus was the further refinement of the Energy Efficiency Design Index (EEDI) for new ships, on the basis of experience gained through its trial application over the past six months. The EEDI is meant to stimulate innovation and technical development of all the elements influencing the energy efficiency of a ship, thus making it possible to design and build intrinsically energy efficient ships of the future.

The group also considered how to improve the Energy Efficiency Operational Index (EEOI), which enables operators to measure the fuel efficiency of an existing ship and, therefore, to gage the effectiveness of any measures adopted to reduce energy consumption. The EEOI has been applied by Member States and the shipping industry, on a trial basis and since 2005, to hundreds of ships in operation; it provides a figure, expressed in grams of CO2 per tonne mile, for the efficiency of a specific ship, enabling comparison of its energy or fuel efficiency to similar ships.

The experts at the meeting debated over a draft Ship Energy Management Plan (SEMP) that has been developed by a coalition of industry organizations and agreed to forward it to MEPC 59 for further consideration. The draft SEMP incorporates guidance on best practices, which include improved voyage planning, speed and power optimization, optimized ship handling, improved fleet management and cargo handling, as well as energy management for individual ships.

The outcome of MEPC 59 will be presented to the Conference that the United Nations will convene in Copenhagen in December 2009, which is set to agree on a successor instrument to the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC).

Update from Marine Environment Protection Committee (MEPC) - 58th session: 6 to 10 October 2008

In the context of the ongoing efforts of the international community to address the phenomena of climate change and global warming (in particular through the mechanisms of the United Nations Framework Convention on Climate Change (UNFCCC)), and in the light of the mandate given to IMO in the Kyoto Protocol to address the limitation or reduction of greenhouse gas emissions from ships, the MEPC maintained momentum on the issue and made substantive progress in developing technical and operational measures to address such emissions, including the development of an energy efficiency design index for new ships and an energy efficiency operational index, with associated guidelines for both; an efficiency management plan suitable for all ships; and a voluntary code on best practice in energy efficient ship operations.

The Committee approved the usage of the draft Interim Guidelines on the method of calculation of the Energy Efficiency Design Index for new ships, for calculation/trial purposes with a view to further refinement and improvement.

The MEPC also held a discussion on market-based measures, and agreed to further discuss such measures at MEPC 59.

For its deliberations on these matters, the Committee received information on Phase 1 of the updating of the 2000 IMO Study on GHG emissions from ships, which estimated emissions of carbon dioxide (CO2) from international shipping both from activity data and from international fuel statistics.

The resulting consensus estimate for 2007 CO2 emissions from international shipping amounts to 843 million tonnes, or 2.7% of global CO2 emissions, as compared to the 1.8% estimate in the 2000 IMO study. The Phase 1 updating estimated future emissions from international shipping based on global developments outlined by the Intergovernmental Panel on Climate Change (IPCC) and, in the absence of future regulations on CO2 emissions from ships, such emissions were predicted in the base scenarios to increase by a factor of 2.4 to 3.0 by 2050. For 2020, the base scenario predicts increases ranging from 1.1 to 1.3, taking into account significant efficiency improvements resulting from expected long-term increases in energy prices.

Further work on the limitation and reduction of GHGs from ships will continue at an intersessional meeting early in 2009, for presentation to MEPC 59 in July, which will benefit from the findings of the second and final part of the update of the 2000 IMO study. The outcome of MEPC 59 will, in accordance with the Committee's established action plan, be presented to the United Nations conference on climate change to be held in Copenhagen in December of next year.

The MEPC further discussed the application of measures to reduce or limit greenhouse gas emissions from ships, in particular whether such measures should be mandatory or voluntary for all States.

Several delegations spoke in favour of the common but differentiated responsibility (CBDR) principle under the UNFCCC. In their view, any mandatory regime aiming at reducing GHG emissions from ships should be applicable to the countries listed in Annex I to the UNFCCC only.

However, several other delegations expressed the opinion that, given the global mandate of IMO as regards the safety of ships and the protection of the marine environment from ship emissions, the IMO regulatory framework on the GHG issue should be applicable to all ships, irrespective of the flags they fly. It was stressed that, as three-quarters of the world's merchant fleet fly the flag of countries not listed in Annex I to the UNFCCC, any regulatory regime on the reduction of GHGs from shipping would be ineffective for the purpose of combating climate change, if it were made applicable only to Annex I countries.

Working Group Oslo June 2008

Progress towards developing a mandatory regime to control greenhouse gas (GHG) emissions from international shipping was made during the first intersessional meeting of IMO's Working Group on Greenhouse Gas Emissions from Ships, held in Oslo, Norway (23 to 27 June 2008). The meeting was attended by more than 210 delegates, comprising experts from all over the world.

The week-long session was tasked with developing the technical basis for reduction mechanisms that may form part of a future IMO regime to control GHG emissions from international shipping, and with developing drafts of the actual reduction mechanisms themselves, for further consideration by IMO's Marine Environment Protection Committee (MEPC), which next meets in October 2008 and, notwithstanding the importance of the Oslo meeting, will have the final, decisive role to play on the issue.

In particular, the Oslo meeting made progress on developing a mandatory CO2 Design Index for ships and an interim CO2 operational index, and held extensive discussions on best practices for voluntary implementation and economic instruments with GHG-reduction potential

Although, to date, no mandatory GHG instrument for international shipping has been adopted, IMO has given extensive consideration to the matter and is currently working in accordance with an ambitious work plan, due to culminate, in 2009, with the adoption of a binding instrument. IMO is working to have measures in place to control GHG emissions from international shipping before the first commitment period under the Kyoto Protocol expires at the end of 2011.

Mandatory CO2 Design Index

The meeting developed further a formula and the methodology, as well as draft text for the associated regulatory framework, for a proposed mandatory CO2 Design Index for new ships. Once finalized, the index will serve as a fuel-efficiency tool at the design stage of ships, enabling the fuel efficiency of different ship designs, or a specific design with different input such as design speed, choice of propeller or the use of waste heat recovery systems, to be compared.

The design index will contain a required minimum level of fuel efficiency related to a baseline, which will be established based on fuel efficiency for ships delivered between 1995 and 2005. The actual minimum level, and the frequency with which the limit will be tightened, are among the matters that will be considered by MEPC 58 in October.

The Oslo meeting thoroughly considered the different elements in the formula to avoid so-called "paragraph ships", meaning future ship designs optimized for certain conditions but which do not actually deliver greater fuel efficiency. The different correction factors to make the formula relevant for all ship types were given extensive consideration, as was verification of the design index, as there might not be a Flag state dedicated to the ship at the design stage.

The meeting encouraged Member States and observer organizations to test the robustness of the agreed draft formula by conducting simulations and submitting the outcome to MEPC 58. With this outcome, MEPC 58 should be in a position to approve the CO2 Design Index for new ships and agree on the final details.

Interim CO2 operational index

The intersessional meeting considered the interim CO2 operational index and identified all areas where changes have been proposed. The interim CO2 operational index was adopted by MEPC 53 in July 2005 and has been used by a number of flag States and industry organizations to determine the fuel efficiency of their ship operations. IMO has received the outcome from thousands of trials and a large amount of data exists.

The interim CO2 operational index has been used to establish a common approach for trials on voluntary CO2 emission indexing, enabling shipowners and operators to evaluate the performance of their fleet with regard to CO2 emissions. As the amount of CO2 emitted from a ship is directly related to the consumption of fuel oil, CO2 indexing also provides useful information on a ship's performance with regard to fuel efficiency. The draft CO2 operational index will be put forward to MEPC 58 with a view to finalizing it at that session.

Best practices for voluntary implementation

The intersessional meeting reviewed best practices for voluntary implementation and developed further guidance for the ship industry on fuel efficient operation of ships. The meeting considered best practices regarding a range of measures identified by earlier sessions of the MEPC and for how they can be implemented by ship builders, operators, charterers, ports and other relevant partners to make all possible efforts to reduce GHG emissions. Operational measures have been identified as having significant reduction potential that often can be achieved without large investments, but would require co-operation with other stakeholders.

Economic instruments with GHG-reduction potential

The Oslo meeting had a thorough and in-depth discussion related to the further development of different economic instruments with GHG-reduction potential including, inter alia, a global levy on fuel used by international shipping and the possible introduction of emission trading schemes for ships. Proposals for both open emission trading schemes, where ships will be required to purchase allowances in an open market in line with power stations or steel mills, and closed schemes, where the trading will only be among ships, were considered.

"Grandfathering" or auctioning of the allowances, how the cap is set and by whom, the management of any system, the banking of allowances and the impact on world trade, as well as legal aspects, were also among the issues considered. The meeting had an extensive exchange of views, paving the way for further discussion at MEPC 58 on the possible introduction of market-based measures to provide incentives for the shipping industry to invest in fuel-efficient ships.

Next steps

MEPC 58 will be held in London from 6 to 10 October 2008 and is expected to consider further the reduction mechanisms developed by the intersessional meeting, with a view to their forming part of the future IMO regulatory regime. MEPC 58 is also expected to consider the related legal aspects and decide whether the GHG regulations should form part of an existing convention or whether an entirely new instrument should be developed and adopted.

However, no clear conclusion was reached as to whether any such instrument should apply to all ships, irrespective of flag, or only to ships flying the flag of Parties to the UNFCCC and listed in Annex I to that Convention.

MEPC 58 will also decide on the work needed prior to MEPC 59, to be held in July 2009, when final adoption of a coherent and comprehensive IMO regime to control GHG emissions from ships engaged in international trade is planned.