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Agreement on IMO Global Fuel Standard in the making

Last week, IAPH attended the 16th meeting of the IMO Intersessional Working Group on the reduction of GHG emissions from ships (ISWG-GHG 16). The session was held ahead of the 81st Marine Environment Protection Committee meeting (MEPC 81) which takes place this week. Member States and international organisations discussed ways forward to develop the basket of candidate mid- and long-term GHG reduction measures to achieve the targets of the 2023 IMO GHG Strategy.

Although delegations were in agreement to develop a Global Fuel Standard (GFS) in the form of a GHG fuel intensity limit and trajectory for emissions reductions, there are diverging views on methodological aspects, including whether or not to include a flexibility mechanism to encourage compliance by all ships. This would either be in the form of flexible compliance units (FCUs), Remedial Units (RUs), or a pooling mechanism, as outlined in the various proposals. For the accompanying global pricing mechanism, further work is required to align delegations. Whilst EU countries and Pacific Island nations continue to advocate for a mandatory global levy as the most simple and effective approach to see the necessary deep reductions in emissions, numerous delegations argued that this would be a tax on distance and could impact trade for those countries far from the markets.

Additionally, some argued that the generation of revenues is a by-product of the measure and not the sole purpose, thus continued to advocate for their respective proposals for a feebate mechanism, or a combined approach to ensure a just and equitable transition. IAPH also co-sponsored a submission providing a glossary of definitions in relation to the reduction of GHG emissions from international shipping. Although aimed at facilitating discussions and decisions making at MEPC 81, the Group agreed that this would be more appropriately disseminated through the new Future Fuels and Technology Portal being designed by the IMO Secretariat that is due to be launched soon. IAPH is also attending MEPC 81 and will disseminate a report to members on the outcomes at the end of this week.
Source: IAPH

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