Key points of the IMO MEPC 76 outcome

by The Editorial Team

June 18, 2021

 

The IMO’s MEPC 76 took place virtually from 10 to 17 June 2021, adopting amendments to MARPOL Annex VI that will require ships to reduce their greenhouse gas emissions, in line with the 2018 Initial IMO Strategy.

 

The meeting also adopted an HFO ban for ships in Arctic. Both decisions were seen as inadequate by green groups and a significant part of the industry.

The new MARPOL Annex VI measures will require all ships to calculate their Energy Efficiency Existing Ship Index (EEXI) following technical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator (CII) and CII rating. Carbon intensity links the GHG emissions to the amount of cargo carried over distance traveled.

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Ships will get a rating of their energy efficiency (A, B, C, D, E – where A is the best). Administrations, port authorities and other stakeholders as appropriate, are encouraged to provide incentives to ships rated as A or B also sending out a strong signal to the market and financial sector.

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A ship rated D for three consecutive years, or E, is required to submit a corrective action plan, to show how the required index (C or above) would be achieved.

 

IMO Secretary-General Kitack Lim said the adoption of the new measures would build on IMO’s previously adopted mandatory energy efficiency measures, to lead shipping on the right path towards decarbonization, although the decisions encountered strong opposition by green groups and major states finding the measures weak.

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The amendments to MARPOL Annex VI (adopted in a consolidated revised Annex VI) are expected to enter into force on 1 November 2022, with the requirements for EEXI and CII certification coming into effect from 1 January 2023. This means that the first annual reporting will be completed in 2023, with the first rating given in 2024.

 

A review clause requires the IMO to review the effectiveness of the implementation of the CII and EEXI requirements, by 1 January 2026 at the latest, and, if necessary, develop and adopt further amendments.

 

Impact assessment

 

In adopting the measure, MEPC also considered the outcomes of a comprehensive impact assessment of the measure which examined potential negative impacts on States, and agreed to keep the impacts on States of the measure under review so that any necessary adjustments can be made.

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In adopting the amendments, the MEPC agreed in its resolution to undertake a lessons-learned exercise from the comprehensive impact assessment of the amendments to MARPOL Annex VI, with a view to improving the procedure for conducting future impact assessments.

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The MEPC also adopted a work plan to develop mid- and long-term measures to further cut shipping’s GHG emissions, in line with the Initial IMO strategy on reduction of GHG from ships.

 

Guidelines adopted

 

Alongside the MARPOL amendments, the MEPC adopted related guidelines to support the implementation of the amendments.

The guidelines include the 2021 Guidelines on the operational carbon intensity reduction factors relative to reference lines (CII Reduction factor Guidelines, G3). This includes the required reduction (Z) factor, which is set at a rate, relative to 2019, of 11% by 2026. This would  be further strengthened after that date, taking into account the review of the measure and latest climate science.

 

Future work

 

The MEPC discussed a number of submissions on how to progress the next stages of IMO’s work to cut GHG emissions from ships, leading to the revision of the initial GHG strategy in 2023.

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The MEPC adopted a work plan on the concrete way forward to make progress with candidate mid- and long-term measures including measures to incentivize the move away from fossil fuels to low- and zero-carbon fuels to achieve decarbonization of international shipping.

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A proposal initially considered by MEPC suggested a mandatory levy of $100 per tonne carbon dioxide equivalent on heavy fuel oil. This proposal will be further considered at the intersessional working group meeting in the context of the adopted workplan along with other proposals for mid-term measures.

 

The work plan envisages three phases:

Phase I – Collation and initial consideration of proposals for measures (Spring 2021 to spring 2022);
Phase II – Assessment and selection of measures(s) to further develop (Spring 2022 to spring 2023); and
Phase III – Development of(a) measure(s) to be finalized within (an) agreed target date(s).

Concessions have been made on all sides in the interest of securing the framework we have in place. Our consideration of mid- and long-term measures will demand even more of us. I am very pleased that the Committee has agreed on a work plan to support carrying out this dimension of our work in a structured way that will keep the membership together,

…said IMO Secretary-General Kitack Lim.

 

IMRB proposal

 

The Committee had a non-exhaustive consideration of a proposal to establish an International Maritime Research Board, funded by a tax on oil fuel used by shipping. The discussion will resume at the Committee’s next session.

 

MEPC 76 – other outcomes

 

–> Prohibiting HFO in the Arctic

 

The MEPC adopted amendments to MARPOL Annex I (addition of a new regulation 43A) to introduce a prohibition on the use and carriage for use as fuel of HFO by ships in Arctic waters on and after 1 July 2024. The prohibition will cover the use and carriage for use as fuel of oils having a density at 15°C higher than 900 kg/m3 or a kinematic viscosity at 50°C higher than 180 mm2/s.

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Ships engaged in securing the safety of ships, or in search and rescue operations, and ships dedicated to oil spill preparedness and response would be exempted. Ships which meet certain construction standards with regard to oil fuel tank protection would need to comply on and after 1 July 2029.

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A Party to MARPOL with a coastline bordering Arctic waters may temporarily waive the requirements for ships flying its flag while operating in waters subject to that Party’s sovereignty or jurisdiction, up to 1 July 2029.

 

–> Amendments to MARPOL Annexes I and IV concerning the exemption of UNSP barges from survey and certification requirements

 

The MEPC adopted amendments to draft amendments to MARPOL Annexes I and IV concerning the exemption of UNSP barges from survey and certification requirements.

The amendment specifies that the Administration may exempt a UNSP barge from the annual survey and certification requirements, for a period not exceeding 5 years provided that the UNSP barge has undergone a survey to confirm that certain conditions are met.

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The amendments also provide the form for the International Oil Pollution Exemption Certificate for Unmanned Non-self-propelled Barges. The MEPC is also expected to approve a related circular on guidelines for exemption of UNSP barges.

 

–> Amendments to AFS Convention – cybutrene

 

The MEPC adopted amendments to the IMO Convention for the Control of Harmful Anti-fouling Systems on Ships (AFS Convention), to include controls on the biocide cybutryne. The AFS Convention already prohibits the use of biocides using organotin compounds.