Clock ticking on shipping shipping emissions measures

by SHAWN CUMBERBATCH shawncumberbatch@nationnews.com

THE CLOCK is ticking for the Caribbean Community (CARICOM) to adopt a unified position on the international shipping industry’s ambitious target to achieve net-zero emissions, a move which promises major consequences for the region.

While the goal is to achieve this by or around 2050, negotiations are ongoing and a final basket of measures is expected to be approved at an April 7 to 11 meeting of the Marine Environment Protection Committee (MEPC 83), which addresses environmental issues under International Maritime Organisation’s (IMO) remit.

This will pave the way for formal adoption of the measures at the MEPC Extraordinary Session from October 13 to 17, which means that, while individual Caribbean countries have been participating in the talks, time is running out for CARICOM as a group to participate.

The time sensitive nature of this was reinforced last week IMO’s 18th Inter-Sessional Working Group on Green House Gas Emissions ( ISWG-GHG 18) took place from February 17 to 21 in London, United Kingdom.

“This is a code red issue for the region and should be seized by CARICOM Heads as a matter of urgency. We need Caribbean heads and leaders to engage immediately on these issues being discussed which will impact transport and trade costs immensely,” said Dr Jan Yves Remy, who was one of the Caribbean representatives at the latest round of talks, is director of the University of the West Indies’ Shridath Ramphal Centre for International Trade Law, Policy and Services (SRC) and project director of Caribbean Shipping Lanes (CSL), the SRC’s dedicated resource initiative on shipping, climate change, and trade.

Officials said that in preparation for the ISWG-GHG 18, technical reports commissioned by the CSL and prepared by CSL experts confirmed findings of the United Nations Trade and Development and maritime industry entity DNV Reports prepared for the IMO GHG negotiations.

Well-designed levy

These included the following which are of major concern for Barbados and other Caribbean countries: All measures under the GHG Strategy will entail costs to the Caribbean.

While a levy would impose greater short-term costs, in the long-term, a well-designed levy with appropriate disbursements would be the most cost-effective transition tool, ensuring financial compensation to countries for the costs incurred.

Credit trading schemes that lack revenue redistribution mechanisms would disproportionately harm Caribbean economies.

The implementation of any GHG policy is likely to lead to increased food prices and reduced imports, particularly affecting essential commodities like unprocessed cereals and fats, exacerbating food insecurity in the Caribbean. Only the High Carbon Levy with Targeted Revenue Distribution can mitigate food security risk in the 2030s and 2040s.

An informal CSL briefing note on last week’s IMO-led negotiations stated: “The ongoing IMO negotiations are critical to shaping the future of international shipping and securing a fair transition for the Caribbean region.

“Active engagement and unified regional advocacy remain key to ensuring that the measures adopted protect Caribbean economies, food security, interests while aligning decarbonisation goals.”

At ISWG-GHG 18, the Group aligned with the delegations from all regions Caribbean and Africa in that includes the Global security, and trade aligning with global the Caribbean coalition of 50-plus regions including the in supporting a package Global Fuel Standard, ensuring a shift away from fossil-based fuels; and the Levy, Distribution and Reward Mechanism, generating funds for equitable distribution to mitigate transition costs.

The CSL note explained that the move to achieve net-zero GHG emissions by or around 2050 was focused largely on the 2023 IMO Revised Strategy, which establishes a dual approach: a goal-based GHG fuel intensity standard and a pricing mechanism for maritime GHG emissions.

To implement this strategy, binding measures – collectively referred to as the “basket of measures” – are being negotiated to support the transition of the shipping industry.

The Strategy outlines emission reduction targets for 2030 and 2040, with a review of net-zero emissions by or around 2050, CSL noted.

With key priorities for this transition being to enable a level playing field and to ensure a just and equitable transition that leaves no country behind, the overall transition is expected to cost over US$1 trillion by 2050.

Remy explained that “while no final agreement has been reached on the levy price and revenue allocation, Caribbean delegations continued to emphasize that a robust levy and appropriate fund disbursement options are the only viable solutions for an equitable transition”.

Reporting on the outcome of the latest negotiations, IMO said that “efforts will continue toward defining amendments to MARPOL Annex VI that could achieve consensus approval at MEPC 83.

MARPOL Annex VI is the legal framework for bringing the various measures into effect and the IMO said that “after reviewing the draft IMO net-zero framework, the chair, in consultation with the secretariat, prepared an updated version of the proposed MARPOL Annex VI amendments”.

“This version consolidates areas of agreement and introduces new possible bridging options for further discussion.

“It will be annexed to the working group’s report to MEPC 83 as a ‘work-in-progress, without preempting future changes, and will be further considered at the 19th meeting of the Intersessional Working Group – April 1 to 4 – ahead of MEPC 83,” the IMO said.

The IMO, which is a United Nations agency, said last week’s meeting was “a step forward” in the effort to curb GHG emissions from shipping.

It added: “The Working Group agreed to keep all proposals for an economic element (GHG emissions pricing mechanism) under consideration and acknowledged potential ‘bridging options’ suggested by some member states.

Accelerate transition

“Efforts will continue toward defining amendments to MARPOL Annex VI that could achieve consensus approval at . . . MEPC 83.”

London-based UCL Energy Institute, which hosts a research group that aims to accelerate the transition to an equitable and sustainable energy and trade system within the context of the ocean, also published an overview of the discussions from ISWG-GHG 18.

It said that “overall, the process is on track to achieve finalisation in April following further intersessional dialogue between member states, the final ISWG-GHG 19 meeting, and work done during MEPC 83 itself”.

“Whilst it also still remains possible that there is no conclusion at MEPC 83, this would not be consistent with IMO’s track record and is frequently explicitly/vocally opposed by effectively all member states – including those opposed to a levy,” UCL stated.

The Caribbean group, CSL explains, has “strong support for a universal levy, which is critical to funding equitable revenue disbursement.

This includes infrastructure development, capacity building and training of seafarers, climate mitigation and adaptation priorities, food security concerns, investment in technologies) and ensuring no country is left behind.

Caribbean representatives also believe that this is “essential to offset welfare losses incurred by member states due to the transition”.

UCL noted that the draft MAPROL amendment “has broad support to include a fund, but whilst the architecture discussion remains unresolved, the expected quantum of the fund is uncertain”.

“However, progress was made in discussion around what the fund could be used for, with a range of, being forwarded,” it stated.

“There is broad support for revenues to be used to reward (subsidise) early adoption of zero and near-zero GHG emission fuels, as well as further uses to support the shipping energy transition, such as research, development and demonstration or investments in port infrastructure.

“There is also broad support for using revenues to assist a subset of vulnerable countries, including to address disproportionate negative impacts, which includes in most member state’s preferences the addressing of food security risks,” it added.

emissions from ships. (FP)