MEPC 83 – crunch time on various fronts but consensus on a

The International Maritime Organization (IMO) is gearing up for its Marine Environment Protection Committee (MEPC) 83 meeting in April, where critical discussions on greenhouse gas (GHG) emissions in the shipping industry will take place. The agenda includes reviewing existing short-term measures, establishing mid-term strategies, and addressing funding challenges for the transition to net-zero emissions by 2050. With diverse interests among its 176 member states, reaching a consensus will be essential yet challenging.

Key Discussions Ahead of MEPC 83

As the MEPC 83 meeting approaches, the IMO has been actively engaging various stakeholders to prepare for the complex negotiations ahead. Two primary work streams will dominate the discussions: one focusing on short-term GHG measures, including the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII), which assesses carbon efficiency per transport work. The second, more significant work stream will delve into mid-term GHG measures aimed at steering global shipping towards its ambitious goal of achieving net-zero emissions by 2050. This transition is not only about reducing emissions but also ensuring a fair and equitable shift for all nations involved.

One of the pressing issues on the table is how to finance the energy transition. The IMO operates on a consensus basis, which means that the diverse priorities of its member states must be reconciled. In the lead-up to MEPC 83, numerous formal and informal meetings have taken place to assess negotiating positions and develop strategies. While differences may arise initially, history suggests that last-minute compromises often lead to resolutions.

Under the experienced leadership of Sveinung Oftedal, Chair of the IMO’s Working Group on Reduction of GHG Emissions from Ships, there is optimism for productive outcomes. Oftedal has a track record of fostering consensus among member states, as seen during the adoption of the 2023 IMO Strategy on Reduction of GHG Emissions from Ships at MEPC 80. His ability to navigate complex discussions is crucial as the group reviews draft legal texts for mid-term measures.

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Funding the Transition: Competing Perspectives

A central topic of debate at MEPC 83 will be how shipowners and operators will finance GHG emissions on a well-to-wake basis. This funding is vital for developing and scaling up carbon-free marine fuels, which currently come at a higher cost than traditional fossil fuels. The discussions reveal two distinct camps: one advocates for a system where under-compliant ships purchase credits to offset their emissions, while the other supports a flat fee for GHG emissions to ensure guaranteed revenue.

Proponents of the credit system argue that it allows for flexibility and market-driven solutions, enabling ships to manage compliance costs. However, critics contend that this approach may not generate sufficient funds to support a just transition, particularly for developing nations and small island states that may struggle with the financial burden of transitioning to cleaner fuels.

Conversely, supporters of the flat fee model argue that it would provide a more stable revenue stream, helping to bridge the cost gap between fossil fuels and alternative energy sources. Yet, there are concerns that this approach could disproportionately impact remote regions reliant on maritime transport, potentially jeopardizing their economic viability.

As the MEPC 83 meeting approaches, the IMO is under pressure to avoid a ‘no deal’ outcome. While the atmosphere is expected to be collaborative, intense discussions are already underway, and the organization aims to reach a consensus that addresses the diverse needs of its member states.