There has been a very mixed reaction to the outcomes of the latest IMO meeting discussing GHG emissions with organisations such as ICS broadly favouring the proposed changes while environmental lobby groups consider them to eb uninspiring.
Draft new mandatory measures to cut the carbon intensity of existing ships have been developed by the seventh session of the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 7), held as a remote meeting 19-23 October 2020. According to the IMO, this marks a major step forward, building on current mandatory energy efficiency requirements to further reduce greenhouse gas emissions from shipping.
The proposed amendments to the MARPOL convention would require ships to combine a technical and an operational approach to reduce their carbon intensity. This is 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 draft amendments will be forwarded to MEPC 75, to be held in remote session 16-20 November 2020. The MEPC is the decision-making body. If approved, the draft amendments could then be put forward for adoption at the subsequent MEPC 76 session, to be held during 2021.
ISWG-GHG 7 also discussed the next steps in assessing the possible impacts on States of the proposed combined measure. The group agreed the proposed terms of reference for assessing the possible impacts on States, paying particular attention to the needs of developing countries, in particular Small Island Developing States (SIDS) and least developed countries (LDCs).
Despite the COVID-19 pandemic and postponements of meetings during the first half of the year, the progress on developing the short-term measures has continued, with two informal remote sessions in July and early October preceding the formal working group session. The progress follows the timeline as set out in the initial IMO GHG strategy. The strategy proposed that short-term measures should be those measures finalized and agreed by the Committee between 2018 and 2023.
The proposed draft amendments would add further requirements to the energy efficiency measures in MARPOL Annex VI chapter 4. Current requirements are based on the Energy Efficiency Design Index (EEDI), for new build ships, which means they have to be built and designed to be more energy efficient than the baseline; and the mandatory Ship Energy Efficiency Management Plan (SEEMP), for all ships. The SEEMP provides for ship operators to have in place a plan to improve energy efficiency through a variety of ship specific measures.
The draft amendments build on these measures by bringing in requirements to assess and measure the energy efficiency of all ships and set the required attainment values. The goal is to reduce the carbon intensity of international shipping, working towards the levels of ambition set out in the Initial IMO Strategy on reduction of GHG emissions from ships.
These are two new measures: the technical requirement to reduce carbon intensity, based on a new Energy Efficiency Existing Ship Index (EEXI); and the operational carbon intensity reduction requirements, based on a new operational carbon intensity indicator (CII).
The dual approach aims to address both technical (how the ship is retrofitted and equipped) and operational measures (how the ship operates).
The attained Energy Efficiency Existing Ship Index (EEXI) is required to be calculated for every ship. This indicates the energy efficiency of the ship compared to a baseline. Ships are required to meet a specific required Energy Efficiency Existing Ship Index (EEXI), which is based on a required reduction factor (expressed as a percentage relative to the EEDI baseline).
The proposals are for ships of 5,000 gross tonnage and above to have determined their required annual operational carbon intensity indicator (CII). The CII determines the annual reduction factor needed to ensure continuous improvement of the ship’s operational carbon intensity within a specific rating level.
The actual annual operational CII achieved (attained annual operational CII) would be required to be documented and verified against the required annual operational CII. This would enable the operational carbon intensity rating to be determined. The rating would be given on a scale – operational carbon intensity rating A, B, C, D or E – indicating a major superior, minor superior, moderate, minor inferior, or inferior performance level. The performance level would be recorded in the ship’s Ship Energy Efficiency Management Plan (SEEMP).
A ship rated D for three consecutive years, or E, would have to submit a corrective action plan, to show how the required index (C or above) would be achieved.
The draft amendments would require the IMO to review the effectiveness of the implementation of the CII and EEXI requirements, by 2026 at the latest, and, if necessary, develop and adopt further amendments.
The MARPOL treaty requires draft amendments to be circulated for a minimum six months before adoption, and they can enter into force after a minimum 16 months following adoption. These are amendment procedures set out in the treaty itself.
The comprehensive impact assessment would be initiated after MEPC 75, following the Committee’s approval of the terms of reference for the impact assessment. The impact assessment would be based on the Procedure for assessing impacts on States of candidate measures, adopted in 2019, which says a comprehensive impact assessment should provide a detailed qualitative and/or quantitative assessment of specific negative impacts on States, and be evidence-based and should take into account, as appropriate, analysis tools and models, such as, cost-effectiveness analysis tools, maritime transport cost models, trade flows models, impact on Gross Domestic Product (GDP); updated Marginal Abatement Cost Curves (MACCs); and economic trade models, transport models and combined trade-transport models.
The final comprehensive impact assessment of the short-term combined measure would be submitted to MEPC 76. Based on this, a possible framework for reviewing impacts on States of the measure adopted, and addressing disproportionately negative impacts on States, as appropriate, would be considered.