Transition Perspective: Outcomes and Implications of MEPC 77

The report A Strategy for the Transition to Zero-Emission Shipping identifies a number of key levers needed to drive the initial emergence phase of the transition, and others that will be essential for the subsequent diffusion phase, when the use of zero-emission fuels will have to be rapidly scaled-up. The report judged policy from the IMO to be particularly important to this diffusion phase, though it also identified a number of ways in which the Organization could potentially support emergence. The following table presents the key levers for these two phases and an overview of how they were addressed at MEPC77.

While the MEPC77 meeting did not debate on all the potential levers of change that the IMO could enable[2], it did spend significant time on a number of key issues, with the following outcomes:

• Clear signals of long-run intent. While the adoption of the Initial IMO GHG Strategy in 2018 created an initial signal that has driven much of the action from the shipping sector since, its stated ambition remains somewhat unclear and is now out of sync with external national and international targets.[3] MEPC77 discussed two proposals that could reduce this ambiguity: one focused on clarification of ambition and another on the revision of the Strategy.In the course of the debate, a majority of Member States that spoke at MEPC77 expressed support of zero GHG emissions by 2050 (of 65 Member States who spoke, 40 supported zero or net zero by 2050, 34 specifically supported zero by 2050). While the resolution[4] on this was not adopted, the meeting’s report ‘recognized the need to strengthen the ambition of the Initial IMO GHG Strategy during its revision process.’[5]
• Bringing together the innovation system and incentivising first movement. The report A Strategy for the Transition to Zero-Emission Shipping suggests that much of the action on bringing together the innovation system supporting First Movers could be championed at the national, regional and industry levels. However, there are policy proposals within the IMO that could also play a meaningful role.The IMRB proposal to collect funds for use in research and development[6] was not approved, but will be considered again at the 12th Intercessional Working Group on GHGs (ISWG GHG12) in May 2022, alongside more comprehensive mid-term measures which seek to enable First Movers with support for deployment of scalable, zero-emission fuels (SZEF). This increases the likelihood that the objectives of the IMRB could be integrated in more comprehensive proposals rather than an R&D policy being approved as a standalone measure. This creates a greater need for first movers and innovation systems to be activated through national, plurilateral and industry action – at least until around 2025.
• Granular signals of long-run intent. While the emergence phase of the transition requires unambiguous signals of long-run intent from policymakers and industry, the diffusion phase to follow will need more granular signals to be in place. These can be thought of as more detailed descriptions of the transition pathway, including expected milestones and the development of policy measures to ensure they are achieved. Policy and industry roadmaps are examples of tools for communicating such signals; in the context of the IMO debates, elaboration of detail on mid- and long-term policy measures could pull this lever. Over time this elaboration will have to provide guidance about timelines, stringency, principles for assessment of progress, equity dimensions and other issues in order for investors to better understand how resources should be allocated.While no agenda item specifically sought to provide the granular signals of long-run intent that will be needed for the broad adoption of SZEF, the relevant mid- and long-term measures were prioritized for future meeting agendas. Among the issues needing clarification, the concept of an equitable/just/fair transition was prominent in the discussions and is likely to remain a key issue in 2022 and beyond.

An expanded analysis, reviewing proceedings, outcomes, and some important steps to come has been compiled by UMAS. You can download that analysis here.

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[1] Additionally the IMO has some initiatives related to innovation and R&D for example the Blue Solutions Project, NextGEN (Next Green and Efficient Navigation), IMO CARES (Coordinated Actions to Reduce Emissions from Shipping) initiative and longstanding efforts to support long-term technology cooperation and capacity building between Members.

[2] https://www.globalmaritimeforum.org/content/2021/10/A-Strategy-for-the-Transition-to-Zero-Emission-Shipping.pdf

[3] https://splash247.com/cop26-sailing-into-sync-with-global-ambitions/

[4] Submission MEPC 77/7/3 co-sponsored by Kiribati, Marshall Islands and Solomon Islands proposed adoption of a resolution ‘that international maritime transport must reach zero GHG emissions no later than 2050’.

[5] Para 7.21 in MEPC 77 WP.1 (Draft Report of the MEPC on its 77th session)

[6] This is a proposal to establish an International Maritime Research Board and accompanying Fund. The proposal puts a mandatory fee of $2 per tonne of fuel consumed to generate funding for R&D for shipping’s transition.