Historic Background


It fell to scientists to draw international attention to the threats posed by global warming.  Evidence in the 1960s and '70s that concentrations of carbon dioxide (CO2) in the atmosphere were increasing first led climatologists and others to press for action.  It took years before the international community responded.
 
In 1988, an Intergovernmental Panel on Climate Change (IPCC) was created by the World Meteorological Organization and the United Nations Environment Programme (UNEP), which issued a first assessment report in 1990 which reflected the views of 400 scientists.  The report stated that global warming was real and urged that something be done about it.
 
The Panel's findings spurred governments to create the United Nations Framework Convention on Climate Change (UNFCCC), which was ready for signature at the 1992 United Nations Conference on Environment and Development - more popularly known as the "Earth Summit" - in Rio de Janeiro.
 
The Kyoto Protocol adopted in Kyoto, Japan, in 1997 is an international agreement linked to the UNFCCC, which major feature is binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions.  The detailed rules for the implementation of the Protocol were adopted at COP 7 in Marrakesh in 2001, and are called the “Marrakesh Accords”.  The Kyoto Protocol entered into force on 16 February 2005.
 
The Kyoto Protocol contains provisions for reducing GHG emissions from international aviation and shipping and treats these sectors in a different way to other sources due to their global activities that is, pursuing though the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) respectively.  Emissions from domestic aviation and shipping are included in national targets for Annex I countries.  ICAO and IMO regularly report progress on their work to UNFCCC.
 

IMO begins work on GHG emissions

In September 1997, an International Conference of Parties to the MARPOL Convention, which adopted the Protocol of 1997 to amend the MARPOL Convention (MARPOL Annex VI), also adopted resolution 8 on CO2 emissions from ships.  This resolution invited the Marine Environment Protection Committee (MEPC) to consider what CO2 reduction strategies might be feasible in light of the relationship between CO2 and other atmospheric and marine pollutants.  The resolution also invited IMO, in cooperation with the UNFCCC, to undertake a study of CO2 emissions from ships for the purpose of establishing the amount and relative percentage of CO2 emissions from ships as part of the global inventory of CO2 emissions.
 
In 2000, the first IMO GHG Study on GHG emissions from ships was published, which estimated that ships engaged in international trade in 1996 contributed about 1.8 per cent of the world total anthropogenic CO2 emissions.
 

Adoption of resolution

In December 2003, the IMO Assembly adopted resolution A.963(23) on IMO Policies and practices related to the reduction of greenhouse gas emissions from ships, which urged MEPC to identify and develop the mechanism(s) needed to achieve the limitation or reduction of GHG emissions from international shipping.  In the ensuing years, MEPC has since been energetically pursuing measures to limit and reduce GHG emissions from international shipping.
 

OUTCOME OF IMO’S RELEVANT MEETINGS

Marine Environment Protection Committee – 62nd session, July 2011

The Committee considered and adopted amendments to MARPOL Annex VI for inclusion of regulations on energy efficiency for ships (resolution
MEPC.203(62)), which are expected to enter into force on 1 January 2013 upon their deemed acceptance on 1 July 2012.  The amendments to MARPOL Annex VI – Regulations for the prevention of air pollution from ships, add a new chapter 4 to Annex VI on Regulations on energy efficiency for ships making the Energy Efficiency Design Index (EEDI) mandatory for new ships and the Ship Energy Efficiency Management Plan (SEEMP) for all ships in operation.  The new regulations apply to all merchant ships of 400 gross tonnage and above regardless of the national flag they fly or the nationality of the owner.
 
A work plan was agreed by the Committee to develop further the guidelines related to EEDI and SEEMP and to include development of the remaining EEDI and SEEMP related guidelines and an EEDI framework for ship types and sizes and propulsion systems not covered by the current EEDI requirements.  For that purposed it was also agreed by the Committee to hold an Intersessional Meeting of the Working Group on Energy Efficiency Measures.  The Intersessional Meeting will take place January 2012 and its report should be submitted to MEPC 63 (February/March 2012).
 
Due to time constraints, MEPC 62 agreed to postpone the consideration of Market-Based Measures (MBMs), UNFCCC related matters and a possible reduction target for international shipping to the next MEPC session (MEPC 63 in February/March 2012).
 

Third Intersessional Meeting of IMO’s Working Group on Greenhouse Gas Emissions from ships, March 2011

The Intersessional Meeting held extensive exchange of views on issues related to the desirability of MBMs providing: certainty in emissions reductions or carbon price; revenues for mitigation, adaptation and capacity building activities in developing countries; incentives for technological and operational improvements in shipping; and offsetting opportunities.
 
The Intersessional Meeting concluded that no incompatibilities existed between IMO establishing an MBM for international shipping, for the purpose of reducing GHG from the sector, and customary international law as depicted in UNCLOS; and that a further impact study was urgently needed, that it should build on the MBM-EG study, and should address both the positive and negative impacts for developing countries, including possible costs if no action was taken by international shipping.  It also agreed also that further studies would be more meaningful and comprehensive when proposals are more detailed and matured, and it therefore urged MBM proponents to fully develop their proposals in the shortest possible time. 
 
The Intersessional Meeting reported to MEPC 62 in accordance to its Terms of Reference, related to: the grouping of the MBMs; the strengths and weaknesses of the groups; their relation to relevant international conventions; and possible impacts.
 

Marine Environment Protection Committee - 61st session, September/October 2010

Although decisions as to how to proceed with the next step of IMO’s climate change strategy were not reached by consensus, the Committee made progress on all three elements of its work, namely technical, operational and MBMs.
 
Having considered means by which technical and operational measures could be introduced in the Organization’s regulatory regime, the Committee noted the intention of some States party to MARPOL Annex VI to request the Secretary–General to circulate proposed amendments to that Annex, to make mandatory for new ships, the EEDI and the SEEMP, both of which have already been disseminated for voluntary use.  The circulated draft amendments would then be considered by the Committee’s next session with a view to adoption under MARPOL Annex VI.  The Committee also noted, however, that some other States did not support the circulation of the proposed amendments.
 
The Committee also held an extensive debate on how to progress the development of suitable MBMs for international shipping, following the submission of a comprehensive report by an Expert Group, which had carried a feasibility study and impact assessment of several possible MBMs submitted by governments and observer organizations.  The Committee agreed to hold an Intersessional Meeting of the working group on GHG emissions from ships in March 2011, tasking the group with providing an opinion on the compelling need and purpose of MBMs as a possible mechanism to reduce GHG emissions from international shipping and further evaluating the proposed MBMs considered by the expert group, including the impact of the proposed MBMs on, among others, international trade, the maritime sector of developing countries, least developed countries (LDCs) and small island developing states (SIDS), as well as the corresponding environmental benefits.
 

Marine Environment Protection Committee – 60th session,
March 2010

More work needed despite GHG progress, IMO Committee concludes.
 
The Committee concluded that more work needed to be done before completing its consideration of the proposed mandatory application of technical and operational measures designed to regulate and reduce emissions of GHGs from international shipping.
 
The Committee agreed to establish an intersessional Working Group to build on the significant progress that had been made during the meeting on technical and operational measures to increase the energy efficiency of ships.  The Working Group reported back to the MEPC 61 (September 2010).
 
Although the meeting was able to prepare draft text on mandatory requirements for the EEDI for new vessels and on the SEEMP for all ships in operation, the Committee noted in particular, that, among other things, issues concerning ship size, target dates and reduction rate in relation to the EEDI requirements all required finalization.
 
The Committee agreed on the basic concept that a vessel’s attained EEDI shall be equal or less (e.g. more efficient) than the required EEDI, and that the required EEDI shall be drawn up based on EEDI baselines and reduction rates yet to be agreed.  The Committee noted guidelines for calculating the EEDI baselines using data from existing ships in the Lloyd’s Register Fairplay database.
 
With regard to MBMs, the Committee agreed to establish an Expert Group on the subject to undertake a feasibility study and impact assessment of the various proposals submitted for an MBM for international maritime transport – again, reporting back to MEPC 61.
 

Marine Environment Protection Committee - 59th session, July 2009

The Committee agreed to disseminate a package of interim and voluntary technical and operational measures to reduce GHG emissions from international shipping; and also agreed a work plan for further consideration, at future meetings, of proposed MBMs to provide incentives for the shipping industry.
 
The agreed measures were intended to be used for trial purposes until
MEPC 60 (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 EEDI 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 SEEMP, 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 EEOI for new and existing ships, which enables operators to measure the fuel efficiency of a ship.
The Committee held an in-depth discussion on MBMs and agreed a work plan for its further consideration at MEPC 60 (March 2010), building on discussions and submissions to date. The purpose of MBMs was: 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 an MBM 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.
 
The outcome of the MEPC on GHG emissions from ships was reported to
COP 15, which was to 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 GHG 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.

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."

Second intersessional meeting of IMO’s Working Group on Greenhouse Gas Emissions from ships, March 2009
 
The Intersessional Meeting made significant progress in the development of measures to enhance energy efficiency in international shipping, and thereby reduce GHG emissions.   The Intersessional Meeting reported to MEPC 59 (July 2009).

The Intersessional Meeting was attended by more than 200 experts from all over the world and 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 MBMs, was debated in depth at MEPC 59.
 
The main focus was the further refinement of the 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 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 SEMP that had 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, and improved fleet management and cargo handling, as well as energy management for individual ships.
 

Marine Environment Protection Committee – 58th session,
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 UNFCCC), and in the light of the mandate given to IMO in the Kyoto Protocol to address the limitation or reduction of GHG emissions from ships, the Committee 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 EEDI for new ships, for calculation/trial purposes with a view to further refinement and improvement.
 
The Committee also held a discussion on MBMs, and agreed to further discuss such measures at MEPC 59 (July 2009).
 
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 CO2 from international shipping both from activity data and from international fuel statistics.
 
The resulting consensus estimate for 2007 CO2 emissions from international shipping amounted 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.

The Committee further discussed the application of measures to reduce or limit GHG 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.
 
First Intersessional Meeting of IMO’s Working Group on Greenhouse Gas Emissions from ships, June 2008

The 1st Intersessional Meeting was held in Oslo, Norway (23 to 27 June 2008) and made progress towards developing a mandatory regime to control GHG emissions from international shipping . The meeting was attended by more than 210 delegates, comprising experts from all over the world.
 
The Intersessional Meeting had been 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.  The Intersessional Meeting reported to MEPC 58 (October 2008).
 
In particular, the Intersessional 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.

Mandatory CO2 Design Index

The Intersessional Meeting developed further the formula and 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 were considered by MEPC 58 (October).
 
The Intersessional 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.
 
Member States and observer organizations were encouraged to test the robustness of the agreed draft formula by conducting simulations and submitting the outcome to MEPC 58.

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 was put forward to MEPC 58.

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 Intersessional 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.

Marine Environment Protection Committee – 53rd session, July 2005

MEPC 53 (July 2005) approved interim guidelines for Voluntary Ship CO2 Emission Indexing for Use in Trials for the purposes of developing a simple system that could be used voluntarily by ship operators during a trial period.
 

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