Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 10), 18-22 October 2021

Various proposals for mid-term measures to reduce GHG emissions, including a number of submissions related to potential market-based measures, have been submitted and considered by an International Maritime Organization (IMO) working group. The session, held remotely, was attended by more than 350 participants from some 70 Member States, as well as from NGOS in consultative status with IMO.

The Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 10), which met 18-22 October, also considered how to further progress work on impact assessments and the development of a mandatory carbon intensity code related to the short-term measures. Possible ways forward to deal with the intense workload related to reducing GHG emissions was also discussed. The report of the working group will be presented to the Marine Environment Protection Committee (MEPC 77), which meets 22-26 November.

Mid-term measures to reduce GHG emissions

The consideration of mid-term measures was progressed in line with the Work plan on the development of mid-and long measures approved by MEPC 76 (June 2021). Various proposals for measures were tabled, in order to be able to understand and compare their main features and implications. The proposals presented covered:

the legal framework of mid-term measures; principles of possible market-based measures
a GHG levy, a GHG fuel standard, a GHG cap-and-trade system, and possible combinations of these
principles of carbon pricing, management and disbursement of carbon revenues.

Further discussion and assessment of mid-term GHG reduction measures, including those that incentivize the use of sustainable low-carbon and zero-carbon fuels in international shipping, will take place in line with the Work plan. The Work plan envisages initial consideration (Phase I) 2021-2022 and assessment and selection (Phase II) from spring 2022 to spring 2023, with a view to achieving goals described in the Initial GHG Strategy.

The Chair noted, inter alia, that, at this stage, all proposed measures were welcomed and would be kept on the table for further consideration under Phase I of the Work plan, without selecting nor excluding any proposal, in order to work towards achieving the 2050 level of ambition in the Strategy. The impact on States of proposed measures, or a combination thereof, would need to be assessed.

The Group requested the Secretariat to prepare an information document summarizing all views expressed on the different proposals to facilitate its further work. Proponents of concrete proposals for mid-term measures were invited to prepare an initial assessment of impacts on States of their proposal (if not already submitted) and to further consider development/refining proposals for mid-term measures for consideration during Phase I of the Work plan.

Impact assessment

The Initial IMO GHG strategy recognizes that the impacts on States of a proposed measure should be assessed and taken into account as appropriate, with particular attention paid to the needs of developing countries, especially small island developing States (SIDS) and least developed countries (LDCs).

The group considered concrete proposals on how to keep under review the impacts of the short-term measure to reduce carbon intensity, which was adopted as amendments to MARPOL Annex VI in June 2021 (Energy Efficiency Existing Ship Index (EEXI); annual operational carbon intensity indicator (CII) and CII rating). In adopting the measure, the MEPC considered the outcomes of a comprehensive impact assessment of the measure which examined potential negative impacts on States, and agreed to keep the impacts on States of the measure under review so that any necessary adjustments can be made.

The group considered how to undertake the lessons-learned exercise, agreeing that it should be completed by MEPC 79 (meeting late 2022). The group recommended that an Ad-hoc Expert Workshop on Impact Assessments should meet to consider concrete proposals for improving the impact assessment procedure and provide recommendations to the Group as part of the lessons-learned exercise.

Development of a mandatory carbon intensity code

The Group considered the interim report of the Correspondence Group on Carbon Intensity and considered the scope of and timeline for development of a mandatory carbon intensity code. In the ensuing discussion, delegations supported the development of a code to ensure a uniform and consistent implementation of IMO regulations on carbon intensity.

The Group requested the Secretariat to identify a possible timeline for the development of a code and to review the content of guidelines from a technical/legal point of view with a view to identifying a possible scope, for the Group's consideration at a future session.

Future sessions

The working group agreed, for consideration by the MEPC, draft terms of reference for ISWG-GHG 11 (envisaged for March 2022); ISWG-GHG 12 (May 2022); and for an Ad-hoc Expert Workshop on Impact Assessments (February 2022).

Working arrangements

The Working Group invited the Committee to note its discussion and support for a proposal to establish a Standing Technical Group on reduction of GHG emissions from ships (ST-GHG) to replace the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG) in the future.

The Group also invited the Committee to note some concerns regarding, inter alia, inclusiveness, oversight by the Committee, administrative burden for delegations, budget, quality of the outcome and multilingualism.