Driving The Change

Categories: NewsPublished On: March 25, 20221278 words38.7 min read

The UK Chamber is committed to delivering workable SOLUTIONS
while maintaining a level playing field for our members.

Anna Ziou, Policy Director – Safety and Environment

The past year has demonstrated the maritime industry’s commitment to take concrete steps towards decarbonising shipping and fighting climate change. The UK Chamber of Shipping has been advocating for our member needs in a number of high-level meetings throughout 2021. In June, we contributed to the IMO’s MEPC76 agreement on  short-term measures to improve the carbon efficiency of existing fleet and prompted discussions on various medium-term measures, including market based measures (MBMs). This was followed, in November, by COP26 in Glasgow, which provided a platform for wider discussions of climate change policy.

Although COP didn’t have a shipping focus and was more focused on shoreside changes, it was vital that the UK Chamber be present in these discussions as they drive international policy and often set the stage for what is eventually decided at IMO. We noticed a shipping industry-led narrative that was significantly more ambitious when compared to the past and in fact there were a number of initiatives and declarations signed during the Glasgow event to cement these ambitions into action. The UK Chamber itself signed up to the Global Maritime Forum’s Call to Action for Shipping Decarbonization by 2050.

The bullishness shown at COP was echoed at MEPC77 in late November, with an increasing number of IMO Member States asking the IMO to committing to zero emission by 2050 and discussions being focused on R&D funding and MBM options. We were very pleased to have received the support of the UK to speak at IMO in support of the ICS $5 billion Research & Development (R&D) fund. However, despite the industry driving change, negotiations at MEPC77 stalled and we saw very little progress in that session.

In fact, we are disappointed by the decision to send the industry’s R&D Fund proposal to the next session of the IMO’s Intersessional Working Group on Reduction of GHG Emissions from Ships. The delay to acting on this proposal elongates the timeline needed to develop the necessary technologies to enable the industry to meet a net zero carbon target by 2050. We were also disappointed – as were other stakeholders – that the IMO did not commit to a resolution to align with the Paris Agreement’s 1.5-degree temperature goals.

The UK Chamber remains committed to achieving net zero carbon by 2050 and we believe that emission reduction measures on an absolute basis to support this goal should start immediately. Carbon pricing is essential to incentivise change in order to meet this goal, which is why we feel that the IMO should implement an MBM using a carbon price mechanism in order to provide the economic incentive to drive change.

As part of our commitment to helping the industry meet this target we are advocating for the need and benefits that a carbon price MBM would bring.

That said, we recognise that different types of MBMs have varying advantages and disadvantages and that there are differences of opinion as to the best way forward – even amongst our membership. This is why we will support any MBM that can be implemented quickly as the need for an MBM is urgent, provides a level playing field, is easy to administer and will not be open to abuse. We believe that to be acceptable, an MBM must provide meaningful economic incentives to adopt net zero energy sources – and any funds generated should preferably be utilised for the benefit of the industry, whether in R&D, infrastructure generation, financial deployment of the new fuels while also ensuring a just and equitable transition in line with IMO’s Common But Differentiated Responsibilities (CBDR) principles. This would increase its effectiveness, ensure industry buy-in and accelerate the journey to decarbonisation. In addition, the UK Chamber recognises that technical and other potential command and control measures implemented on a global basis by the IMO are necessary to complement an MBM as they will drive greenhouse gas emissions efficiency in the operation of the existing fleet.

We recognise that the discussion around MBMs is still developing and is politically controversial, but we believe that these are urgently needed. This is a view shared by UK Chamber members, who have unequivocally stated that MBMs are critical to transitioning shipping to 2050 decarbonisation targets and incentivising a greener, more efficient fleet. If an international approach is not agreed, we risk the creation of multiple regional regulations. This can already be seen in with the decision, in March 2021, to include international shipping in the UK’s domestic carbon budget. This is significant as it makes the UK legally responsible for the net zero status of international vessels calling at UK ports from 2050 onwards – which is extremely challenging without a global standard.

The UK Chamber is sensitive to the fact that the IMO has been working on this divisive issue during the Covid pandemic, which has necessitated online sessions with limited timings. As we return to in-person meetings, we hope that these will facilitate greater change and collaboration and that the next MEPC will see more decisive action come out of the IMO and its Member States. Everyone must come to the table prepared to be flexible, with a mindset of compromise and with a willingness to put aside political agendas for the greater good.

As we make progress on MBMs, we must also ensure that other decarbonisation issues receive sufficient focus. In particular, we feel that attention should be paid to the development of a framework for the lifecycle of fuels and the fair implementation of the upcoming Carbon Intensity Indicator (CII) regulation, which comes into force in 2023.

Aside from the IMO, the Chamber has also been more active in the UK’s domestic action. We have been engaging with the Department for Transport  (DfT)on the Transport Decarbonisation plan which was published in summer 2021, at the same time as the EU’s Fit for 55 proposal. The plan includes a number of commitments and consultations, which we expect to resolve in forthcoming discussions about how to decarbonise the UK’s maritime sector. This includes a review of the clean maritime plan to improve targets for the domestic sector, as well as a plan for the potential phase out date for sale of non-zero emission domestic vessels.

The Chamber and its members have also worked closely with the UK Government over the past year. We facilitated workshops about how best to transition the Clydebank Declaration for green shipping corridors from an agreement to a working reality, became a supporting member of the Operation Zero initiative that aims to demonstrate shipping’s leadership in climate action in the offshore wind sector and we have also been collaborating closely with the DfT to develop guidelines on the UK MRV scheme which implements the EU MRV in UK waters in a post-Brexit era.

We have also worked closely with the DfT in the development of a spending review and we were pleased to see that a budget of £300 million has been announced. We expect a large proportion of this to be used to help decarbonise the UK maritime industry so that it is on a par with other transport modes. The UK Chamber is a member of a number of national taskforces that focus on economic incentives for domestic shipping, clean maritime technologies and fuel pathways, shore power infrastructure in UK ports, and international shipping. We will use these platforms to continue to advocate for our members and to ensure that we remain competitive in a decarbonised future.