IMO Secretary-General Arsenio Dominguez’s appeal to participants at the opening of last week’s MEPC84 meeting to avoid a repeat of the previous session’s acrimonious levels of discord appears to have been heard. While delegates still agreed to disagree on the details of the proposed IMO Net-Zero Framework (NZF), this was a much more constructive outcome than the open conflict that marked last October’s well titled MEPC Extraordinary Session.
Notwithstanding the calmer and more constructive atmosphere of the meeting, significant and fundamental areas of contention remain, a globally agreed regulatory framework is still some way off.
The debate around the IMO’s Net-Zero Framework (NZF) has broadly coalesced into a few key blocks, each with distinct priorities on how shipping should decarbonise; who, if anyone, pays, and, if so, how much and where does the revenue go? Other key issues are how fast should decarbonisation progress and should the commercial feasibility of decarbonisation set the pace of change or should it be done through the setting of targets. While positions continue to evolve, the main lines of division are now relatively clear:
High ambition: Most EU countries, UK and some Pacific states want to see a strong enforceable global fuel standard with carbon pricing and clear timelines for implementation.
Broadly, Russia, Saudi Arabia, UAE and United States, all of whom are major oil producers and exporters, oppose the NZF.
In the hope of finding a way ahead, other countries, including Japan, have put forward proposals that completely remove the mandatory carbon pricing mechanism and ease the well-to-wake Global Fuel Intensity (GFI) reduction trajectory. This approach seems to have strengthened during the meeting through the proposal that compliance deficits in one ship are offset by using surplus units generated by over compliant vessels.
While there are many other shades of grey and countries with specific, distinct agendas, discussions will now continue to try to refine the proposals and to come to an agreement on an acceptable way forward ahead of the planned vote for adoption in October.
There is much work to be done.
