Latest text shows GFS, credit trading and levy options in MARPOL Annex VI amendments – UCL

Global shipping regulations could set annual GHG intensity caps at 5.8–10% or even 12–24.5% by 2030, a UCL report outlines.
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The IMO’s Intersessional Working Group on the Reduction of Greenhouse Gas Emissions (ISWG-GHG) has advanced a draft amendment to MARPOL Annex VI that will introduce Chapter 5 to support the regulator's net-zero emissions framework.

Text outlining the proposed Chapter 5 was discussed at ISWG-GHG 18 last week. This text may form the basis of a future draft amendment, which could be considered for agreement at MEPC 83 in April. However, it has not been confirmed, and the text could be changed during future discussions, according to a report by UCL Shipping and Oceans Research Group, which is a part of UK's UCL Energy Institute.

The latest text shows a technical measure in the form of a global greenhouse gas fuel standard (GFS) could require every vessel to meet an annual average GHG emissions intensity target based on the energy used onboard. It could be calculated on a well-to-wake basis or an adjusted tank-to-wake basis, which includes upstream emissions.

Compliance would be assessed by comparing a ship’s attained greenhouse gas fuel intensity (GFI) with a specified GFI standard. The GFI measures the total GHG emissions released into the atmosphere based on the amount of energy used by a ship, and is expressed in grams of CO2-equivalent per megajoule of energy (gCO2e/MJ).

The UCL report outlines two scenarios for fixing a GHG intensity cap. In one scenario, the cap could range from 5.8% to 10% by 2030, increasing to 65%–68% by 2040. In another scenario, the cap could be set between 12% and 24.5% in 2030, rising to 67.5%–78.5% by 2040.

The baseline has not yet been determined, but it may be compared to 2008 as the base year, in line with the IMO’s 2023 GHG strategy.

Non-compliant vessels could either purchase credits from overperforming ships or the IMO's reserve units, or pay a surcharge.

Additionally, the text includes an economic measure, which could involve either a GHG levy or an expanded credit trading system. Revenues from the mid-term measures could be directed to the IMO’s net-zero emissions fund, to support net-zero fuel incentives and infrastructure development.

The measures would apply to ships over 5,000 GT and be subject to periodic review, with potential adjustments to GFI targets, pricing mechanisms and ship size thresholds, the report noted.

By Konica Bhatt

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