Mandatory Energy Efficiency Measures for International Shipping Adopted at London Meeting

20 July 2011

The Marine Environment Protection Committee (MEPC) of the UN International Maritime Organization (IMO) adopted mandatory measures to reduce emissions of greenhouse gases (GHGs) from international shipping, when it met last week at IMO Headquarters in London. This decision marks the first ever mandatory global greenhouse gas reduction regime for an international industry sector.

Shipping currently represents about three  percent of global emissions, while transporting approximately 85 percent of goods traded internationally. While shipping is a relatively efficient mode of transport, the size of the sector means that it emits high quantities of greenhouse gases.

The amendments to the International Convention for the Prevention of Pollution From Ships (MARPOL) add a new chapter on energy efficiency regulation for ships. The chapter makes the Energy Efficiency Design Index (EEDI) mandatory for new ships, and the Ship Energy Efficiency Management Plan (SEEMP) mandatory for all ships.  The regulations are expected to enter into force on 1 January 2013.

The result shows a major turnaround since negotiations in October saw parties unable to reach consensus on whether the EEDI should be mandatory for both developed and developing countries. (See Bridges Trade BioRes, 11 October 2010). The IMO and ICAO (International Civil Aviation Organization) have both been tasked by the UN Framework Convention on Climate Change (UNFCCC) with developing their own mechanisms for reducing carbon emissions. However, both the IMO and ICAO do not utilise the UNFCCC principle of common but differentiated responsibility, which places the greater part of the burden of emissions reductions on developed countries.

Instead, the IMO and ICAO require all shipping/aviation flag states to be treated the same according to the equal treatment principle. As a result, some countries, such as China, asked at the October meeting that the EEDI be mandatory only for developed countries and voluntary for developing countries (see Bridges Trade BioRes, 11 October 2010).

Indeed, at last week's meeting Brazil, China, Saudi Arabia, and South Africa were able to obtain a six and a half year delay for implementing these regulations on those ships registered in developing nations, according to British newspaper the Guardian. That way, developing nations could have the time to acquire the necessary technologies to comply with the regulation.

In addition, the new chapter includes a regulation on technical assistance and technology transfer, especially for the benefit of developing countries, relating to the improvement of energy efficiency for ships.

The agreement from last week's meeting however was not reached by consensus, IMO Secretary-General Efthimios Mitropoulos noted. Despite this, he expressed the hope that forthcoming work on the subject "will enable all Members to join in, so that the service to the environment the measures aim at will be complete."
The EEDI is the first globally binding measure to improve energy efficiency of new ships and limit carbon emissions from international maritime transport. It is also a performance-based mechanism that allows the industry to choose the technology used in designing their ships, so long as they attain the required energy-efficiency level.

The new regulations apply to all ships that exceed 400 gross tonnage, and will require those ships built after 2013 to increase their efficiency by 10 percent, going up to 20 percent between 2020 and 2024 and 30 percent for those produced thereafter.

The EEDI will lead to less carbon emissions - approximately 25-30 percent reductions by 2030 compared to the Business as Usual (BAU) scenario. The EEDI will be applied to the largest segments of the world merchant fleet, and is expected to cover as much as 70 percent of emissions from new ships.
The SEEMP establishes a mechanism for operators to improve the energy efficiency of ships, such as by better managing the speed throughout a ship's voyage.

At the meeting, the MEPC also agreed upon a work plan to develop the EEDI framework for ship types and sizes and propulsion systems that are currently not covered by the EEDI, along with guidelines relating to both the EEDI and SEEMP.
European Commission, environmental NGOs want to go beyond efficiency measures

The European Commission congratulated the IMO and its 169 Member States on the adoption of the EEDI. "This is a very important signal that the maritime community is taking seriously its role in global efforts to reduce greenhouse gas emissions. I want to thank the EU Member States for their efforts in making this happen and our international partners for joining us in finding global solutions to global problems," said Siim Kallas, Commission Vice-President responsible for Transport.

Climate Action Commissioner Connie Hedegaard also praised the agreement, adding that "I also hope this momentum will help the ongoing debate on further reducing emissions from international maritime transport.''

While the EU lauded this development, the EU also urged the IMO to push forward toward agreeing on market-based measures to limit carbon emissions. In its recent White Paper on Transport, the Commission proposed to reduce emissions from EU shipping by at least 40 percent by 2050 compared to 2005 levels.

The Clean Shipping Coalition, a global environmental organisation that includes members such as Washington-based green group Oceana and the Environmental Defense Fund, similarly welcomed the IMO decision, but like the EU urged the IMO to push for market-based and operational measures, such as emissions trading or mandatory cuts.

The coalition also criticised the maritime group for only applying the measures to new ships, not existing ones. Finally, the NGOs  noted that the six year waiver for developing countries could allow developed nations to avoid the regulations, by choosing to flag their ship in a developing nation.

In a statement, Bill Hemmings of Transport & Environment noted that "Adopting the EEDI is the right step but the long delay weakens its short- to medium-term impact significantly.  If the IMO does not deliver action quickly now on existing ships, it will be up to the EU to take the lead at a regional level."

The European Commission has suggested earlier that it intends to take unilateral action by including shipping in the EU ETS in case the IMO cannot take appropriate measures. Aviation will be included in the EU ETS from 2012, which has already caused substantial controversy (see Bridges Weekly, 8 June 2011 and Bridges Trade BioRes, 27 June 2011).

ICTSD reporting; "Maritime countries agree first ever shipping emissions regulation," THE GUARDIAN, 18 July 2011.

This article is published under
20 July 2011
China's recent announcement that it would further tighten its rare earths export quotas came as a surprise, given that the WTO found similar restrictions on raw materials to violate trade rules (see...
20 July 2011
On Wednesday, 20 June, the WTO saw the start of the first climate change-related dispute in its history. After much expert discussion on the issue, the WTO might now be beholden to rule on the...