The ongoing discussions about greenhouse gas (GHG) emissions in the maritime sector have reached a pivotal point, as highlighted by Eirik Nyhus, the director of environment for maritime at DNV. In a recent Baltic Maritime Impact podcast, Nyhus addressed concerns about the slow progress and intense political negotiations influencing the outcomes of the Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 18). The primary goal of this meeting was to advance political discussions and prepare legal texts for mid-term GHG measures, specifically developing a “net-zero framework” for approval at MEPC 83.
This framework includes two essential components: a technical measure, the Greenhouse Gas Fuel Intensity (GFI) regulation, aimed at reducing the carbon intensity of marine fuels, and an economic measure designed to promote the adoption of low- and zero-emission alternatives. However, reaching a consensus remains challenging, with numerous key issues still to be negotiated. Nyhus points out that two significant obstacles are hampering progress: the methodology for calculating GFI and the structure of the economic measure.
The debate over GFI revolves around the appropriate approach to measure a fuel’s lifecycle emissions, with differing opinions on whether to use a well-to-wake or tank-to-wake model. Although no agreements were forged during ISWG-GHG 18, Nyhus remains cautiously optimistic about eventual resolution on this front. Conversely, the economic measure presents a more complex hurdle.
Two divergent proposals are on the table: one integrates an economic element into the GFI framework, while the other suggests a standalone GHG levy, which would mandate payments based on emissions. Political divisions among countries complicate this aspect, particularly with some nations opposed to the levy. Moreover, discussions about how to distribute revenue from any economic measures add further layers of complexity.
Nyhus expresses the urgency for intersessional consultations to facilitate consensus before MEPC 83, which is fast approaching. He anticipates a package deal that includes a technical GFI and an economic instrument but not a levy, as well as a collective effort from Member States to avoid divisive voting scenarios. The upcoming meeting promises high stakes, and significant negotiations are expected in the days leading up to it.