Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 16), 11-15 March 2024

The Intersessional Working Group on Reduction of Greenhouse Gas (GHG) Emissions from Ships (ISWG-GHG 16) met for its 16th meeting ahead of the 81st session of the Marine Environment Protection Committee (MEPC 81). The Group's report will be presented to MEPC 81 on Monday, 18 March.

Proposals on GHG fuel standard and pricing mechanism

The Intersessional GHG Working Group continued discussions on proposals on candidate mid-term GHG reduction measures. The 2023 IMO GHG Strategy commits Member States to developing and adopting (in late 2025): a technical element, namely a goal-based marine fuel standard regulating the phased reduction of a marine fuel's GHG intensity; and an economic element, on the basis of a maritime GHG emissions pricing mechanism.  

Proposals under consideration cover both these elements. The Group noted the commitment and willingness expressed by many delegations to continue to work together to improve their common understanding and to explore possible convergences among the different proposals in the further development of the basket of mid-term measures.

In considering GHG emissions pricing mechanisms and associated revenue collection and distribution, all delegations that spoke reiterated their commitment to the development of an economic element as part of the basket of mid-term measures, on the basis of a maritime GHG emissions pricing mechanism as included in the 2023 IMO GHG Strategy, which aims to "effectively promote the energy transition of shipping and provide the world fleet a needed incentive while contributing to a level playing field and a just and equitable transition".

Having recognized that all delegations saw merit in the development of a global fuel standard alongside a GHG pricing mechanism, the Group noted that different views were expressed over an integral approach, where technical and economic elements would be integrated into the goal-based marine fuel standard through flexibility compliance strategies, versus an approach where a complementary GHG pricing mechanism covering all emissions would be developed in addition to the goal-based marine fuel standard.

The Group noted that the candidate economic elements would be assessed observing specific criteria, to be considered in the ongoing comprehensive impact assessment, with a view to facilitating the finalization of the basket of mid-term measures. 

GHG fuel standard development

With regard to proposals for a goal-based marine fuel standard regulating the phased reduction of marine fuel's GHG intensity, the Group committed to further develop such a standard as part of the basket of mid-term GHG reduction measures, taking into account the well-to-wake GHG emissions of marine fuels, including further consideration of the proposed different approaches to operationalize that; while agreeing that further work remained to frame the GHG fuel intensity baseline and reduction trajectory in line with the levels of ambition and indicative checkpoints set out in the 2023 IMO GHG Strategy.

There was broad support within the Group for the use of existing IMO instruments for associated reporting and verification requirements, while the need to further consider the development of additional tools such as a central registry was also noted.

Impact assessment

The Working Group received a progress report from the Steering Committee on the conduct of the comprehensive impact assessment of the basket of candidate mid-term GHG reduction measures. The impact assessment is a crucial element to support decision making on the mid‑term measures and, inter alia, considers the following areas: geographic remoteness of and connectivity to main markets; cargo value and type; transport dependency; transport costs; food security; disaster response; cost-effectiveness; and socio-economic progress and development.

The Group noted oral updates provided by the coordinator of the Steering Committee on the tasks assigned to the Committee, i.e.: 

  • Task 1 - literature review (WMU) – preliminary results.

  • Task 2 - assessment of impacts on the fleet (DNV) – 12 of 20 initial policy combination scenarios have been modelled.

  • Task 3 - assessment of impacts on States (UNCTAD) - utilization of the Global Trade Analysis Project (GTAP) model, a global Computable General Equilibrium Model that covers details of 160 economies which are linked via trade, as the main model for this task.

  • Task 4 - methodology to be used for the complementary quantitative/qualitative stakeholders' analysis of potential negative impacts on specific Member State commodities (Starcrest) in 10 selected States, which would target a limited number of commodities for each of these countries.

The Group noted the progress made with the comprehensive impact assessment of the basket of candidate mid-term measures and the interim results and requested the IMO Secretariat to convey comments made and questions posed following consideration of the progress report to the Steering Committee for further consideration.

Next steps

The Group agreed to recommend to the Committee that a two-day expert workshop (GHG‑EW 5) on the further development of the basket of candidate mid-term GHG reduction measures should be held and its outcome reported to MEPC 82.

The group also agreed to the holding of ISWG-GHG 17, preferably back-to-back with MEPC 82, subject to approval by MEPC 81 and endorsement by the Council.

LCA guidelines

MEPC 81 is expected to adopt revised Guidelines on Life cycle GHG intensity of marine fuels (LCA Guidelines). The Working group finalized the draft 2024 Guidelines on Life cycle GHG intensity of marine fuels (2024 LCA Guidelines) and the associated MEPC resolution, with a view to adoption by the Committee.

The LCA Guidelines allow for a Well-to-Wake calculation, including Well-to-Tank and Tank-to-Wake emission factors, of total GHG emissions related to the production and use of marine fuels. The updates include revised calculations for default emission factors; an updated appendix 4 on template for well-to-tank default emission factor submission; and a new appendix 5 template for Tank-to-Wake emission factors.

The Group invited MEPC 81 to agree, in principle, to the establishment of a GESAMP Working Group on Life Cycle GHG Intensity of Marine Fuels (GESAMP-LCA WG) to review scientific and technical issues.

Onboard CO2 capture

The Group noted broad support to continue the consideration of proposals related to onboard CO2 capture. It was noted that some elements would have to be considered as part of the further development of the LCA framework, including potentially by the proposed GESAMP-LCA Working Group. The Group invited the Committee to instruct the Working Group on Air Pollution and Energy Efficiency, expected to be established at MEPC 81, to develop a work plan on the development of a regulatory framework for the use of onboard CO2 capture and, if the outcome of the discussion so indicated, to develop draft terms of reference for a Correspondence Group.

MEPC 81

The report of the intersessional group will be presented to MEPC 81 as document MEPC 81/WP.4. A Working Group on Reduction of GHG Emissions from Ships will be established during MEPC 81.