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IMO warns against ‘trouble’ and ‘confusion’ for global decarbonisation efforts amid EU emissions push

In a moment of deja vu, the IMO finds itself addressing the policy of the EU towards GHG emissions. Only this time, the effort to regulate shipping emissions on an EU level is larger and appears more forceful. IMO secretary general Kitack Lim argues that the IMO is making real progress on GHG and cautioned against putting negotiations in ‘difficulties’

The IMO secretary general says he intends to travel to Brussels, while industry lobbies express concerns over Commission and Parliament intention to regulate shipping emissions

THE INTERNATIONAL Maritime Organization has warned against the disruption of global decarbonisation progress, in response to the European Commission’s push to regulate shipping emissions.

“If we want real progress, the process of IMO discussions should not be [jeopardised],” IMO secretary general Kitack Lim told Lloyd’s List during an interview on Wednesday.

Earlier that day, European Commission president Ursula von der Leyen unveiled her Green Deal, in which she formalised the Commission’s intention to include maritime in the EU Emissions Trading System, a move strongly supported by the European Parliament but vehemently opposed by some of the most powerful shipping interests.

The IMO has long opposed maritime inclusion in the ETS, which caps companies’ permitted carbon emissions and lets them purchase allowances to emit more.

“We have to make progress. We do not want to put the IMO meetings [on greenhouse gas emissions] in difficulties,” Mr Lim said.

His warning echoes a familiar line of criticism held by opponents of the Commission’s aspirations regarding emissions; regional measures will disrupt the agreed global approach at the IMO, which has taken years to develop and is still being implemented, the argument goes.

Proponents of the EU taking the lead suggest it will help reduce emissions and accelerate the development and uptake of low and zero carbon fuels, as burning fossil fuels become more expensive.

Speaking after the Green New Deal was unveiled on Thursday, Mr Lim praised the IMO’s progress on GHG emissions so far.

He claimed the organisation had done “excellently” since the EU decided to temporarily leave maritime outside of the ETS, back in late 2017. The IMO adopted a landmark initial GHG strategy in April 2018.

“The IMO is making normal, successful progress...according to the initial strategy. We are making progress towards 2023,” he said.

Looking ahead, 2023 is the year when the IMO is set to revise its strategy, including its landmark targets. It is also the effective deadline the EU had given to the IMO to adopt a satisfactory global measure to hold back from including shipping in the ETS.

“We have to make progress towards 2023, anticipating the 2050 targets,” he said, adding that nobody would want to cause confusion in this effort.

If the Commission and the Parliament do not change their minds and if they can convince the Council to agree to add shipping in the ETS, the industry will have its first market-based measure on emissions.

Mr Lim emphasised that the IMO will also consider potential market based measures for shipping.

But those discussions at the IMO are expected further into the future when a revised strategy will have replaced the existing one. According to the GHG strategy’s timeline, member states could agree on market based measures after 2023, but with no commitment thus far to introduce any of them.

Mr Lim said a key part of his strategy is to continue communication with the EU, which he said the two sides have established since 2016 and for which he thanked the last Commission.

Mr Lim said he plans on visiting Brussels some time in February to meet with members of the new Commission and Parliament.

“Once we talk, we [will] realise we are pursuing and seeking certain common targets,” he said.

One of the things he wants the IMO to do is explain to MEPs the impact that measures can have on shipping.

When the European Parliament was pushing for the inclusion of shipping in the ETS in 2017, Mr Lim had worked hard to prevent shipping’s inclusion in the ETS via public and private interventions

He openly criticised the move, urging Brussels to reconsider and met with EU stakeholders to push for the continuation of global emissions regime.

Mr Lim stressed that at the time that EU governments put their trust in the IMO and that the Commission had congratulated the organisation for its achievement in adopting the GHG strategy.

This time around, the secretary general is hopeful a similar approach founded on communication can have the same end, although he admitted his rationale that has not always been popular, even within IMO circles.

“I was discouraged by several people when I wanted to go to Brussels in 2016,” he said.

Even now, some people argue that it should be the EU coming to London to speak with a UN agency, rather than the other way around, he explained.

But Mr Lim believes the approach does not matter so long as the target is achieved.

“If this belief — my position — is not working, it is a failure to myself. But I believe it works,” he said.

Industry warns Commission to against ETS pursuit

The IMO’s sentiments about the potential of an EU-based measure are shared by influential actors in maritime, particularly from the shipowning side.

Industry groups have long argued against regional measures, such as the ETS, claiming it would stifle progress for global decarbonisation and also penalise only one part of the global fleet.

The International Chamber of Shipping, whose members are national shipping associations accounting for more than 80% of the global fleet, said it recognises the Commission’s good intentions but fears they could be counterproductive to reducing emissions globally.

Progress on the implementation of the IMO GHG strategy is happening with the full support and goodwill of non-EU member states, ICS deputy secretary general Simon Bennett said.

“If the EU proceeds with regional measures with application to non-EU flag ships calling at EU ports, this could undermine the positive momentum that now exists at IMO,” he told Lloyd’s List.

BIMCO, the world’s largest shipping association, also strongly disapproved of the measure.

“BIMCO has long held the view that the ETS is unsuitable for the international shipping industry as it is a regional scheme which cannot effectively have any impact on shipping’s global emissions,” BIMCO deputy secretary general Lars Robert Pederson told Lloyd’s List.

He recognised that the Commission’s Green New Deal acknowledges the role of the IMO in global decarbonisation.

“However, suggesting that the proceeds raised on allowances purchased by international shipping should go to fund the EU budget is not something that IMO member states from outside the EU are likely to applaud,” he added.

The World Shipping Council, the largest container shipping association, deemed the IMO to be the “only practical forum for reducing GHG emissions from international shipping”.

“A global industry needs a global solution,” the WSC said in a statement to Lloyd’s List.

It emphasised that the Commission actually recognises the IMO’s importance in its Green Deal and forecast that 2020 would be a “very active year” for the development of GHG solutions.

“Those of us in the discussion will do the most good by asking ourselves and each other whether the solutions we collectively propose will deliver real reductions and will move us away from fossil fuels and towards finding the low and no-carbon fuels of the future,” the WSC said.

National European groups also expressed issues with the Commission’s plans. 

Danish Shipping welcomed the ambitions of the Green Deal but said it was sceptical of the intended extension of ETS onto maritime and argued that any actions the EU takes can be implemented by the IMO to apply to a global scale.

The German Shipowners’ Association, known as VDR, also endorsed the Green Deal but warned that the ETS would not actually help reduce emissions, just make carbon more expensive.

The focus should instead be on progress at the IMO.

“This is why we need a highly skilled diplomatic European Commission and EU member states in London with strong negotiating skills that, together with other important shipping nations of this world, will contribute towards driving the ambitious objectives of the IMO forward on a global scale — in the interests of global climate protection and fair competition in our international industry,” VDR chief executive Ralf Nagel said in a statement. 

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