Decarbonisation Technology - February 2022 Issue

Looking again at Figure 1 (blue line, CO 2 emissions), it is clear that IMO’s actions so far already have had a significant effect on shipping emissions. Up to 2008, there was a direct correlation between global trade and shipping emissions. Since then, demand for seaborne global trade has continued to grow, while emissions remained roughly at the same level. Current IMO discussions At the COP26 meeting in Glasgow, observers noted a growing momentum to increase the ambition of the IMO target for international shipping towards achieving net zero by 2050. Major shipping industry organisations such as the International Chamber of Shipping are explicitly supporting the 2050 net-zero target and many expressed the hope that the momentum of COP26 would continue at IMO’s MEPC, which was held in the third week of November 2021. Carbon neutrality by 2050 was effectively discussed at the meeting, but IMO’s Member Countries have not yet reached a decision on this. However, importantly, the Committee explicitly recognised the need to strengthen the ambition of the Initial IMO GHG Strategy during its revision process and formally agreed to initiate the revision of the Initial IMO Strategy in line with the original 2023 timeline. Terms of Reference for this work have been agreed. A certification process will be critical to ensure consistent use of the methodology and to create confidence in the numbers provided Life cycle approach for low and zero carbon fuels While this outcome has been seen as a disappointment by several countries and observers following the ‘momentum’ that was generated around shipping at COP26, in my view MEPC 77 has made meaningful progress. Adjusting the 2050 target and sharpening ambition is one thing, but even more important is to work on the near-term actions that will facilitate the introduction of low and zero carbon (LC and ZC) fuels. In fact, several delegations noted during

the MEPC meeting that it was more important to now focus on concrete measures than on a new resolution concerning the 2050 target. LC and ZC fuels will be more expensive than today’s conventional fuels. As a result, there is a growing consensus that some form of Market Based Measure (MBM) establishing a carbon price will be needed to create the business case for LC and ZC technologies and make their use economically attractive compared to conventional high carbon footprint fuels. Regardless of which MBM will eventually be selected, a sound methodology for assessing the well-to-propeller GHG footprint of fuels will be required. MEPC has already started work on this topic. The methodology should include default values for different fuels and their manufacturing pathways, covering today’s conventional fossil fuels as well as LC and ZC fuels. In addition, there should be an option to establish a fuel’s GHG footprint on the basis of certified actual data. This would be a strong incentive for the development of new, innovative fuel production pathways that truly deliver substantial ‘life cycle’ GHG savings. The discussions were progressed at the November MEPC meeting and further work for the coming months has been defined, including the development of criteria for fuel certification schemes and the mechanisms for regular review of default upstream and downstream emission values. A certification process will be critical to ensure consistent use of the methodology and to create confidence in the numbers provided. The sooner this process can be finalised, the better. This will allow it to be introduced gradually as new LC and ZC fuels come to the market. Where conventional fuels are concerned, independent verification using default GHG footprint values should be Certification process for low and zero carbon marine fuels straightforward. But having internationally recognised and independently verified carbon footprint data would be a key element in providing regulatory certainty for the developers and buyers of LC and ZC fuels. The next step will be to modify the format of the Bunker Delivery Note (BDN) to include GHG footprint information of the fuel supplied. I believe this work should be started now, to make sure the