Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.
Download the PDF
July 19, 2023
IMO Pursues Carbon Emissions “Deal of the Decade”
The IMO’s recently completed a meeting where it agreed to a revised GHG emissions reduction plan, reaching net zero by about 2050. We explored some of the actions and challenges facing the global shipping industry. Green fuel technologies remain immature and expensive. Their use will boost global shipping costs when other remedies exist. Slow steaming, adding sails to assist propulsion, and increased use of compliant fuels will help reduce emissions. This industry remains difficult to decarbonize. Yielding to the demands of climate activists to accelerate the pace of cutting may lead to expensive mistakes, not just for shipping but for the world’s economy. READ MORE
IMO Pursues Carbon Emissions “Deal of the Decade”
Having failed to get on board with the 2015 Paris Climate Agreement, the United Nations International Maritime Organization (IMO) came under severe criticism. Instead of chasing CO2 emissions, the IMO elected to attack the shipping industry’s sulfur emissions problem first, recognizing this as a far greater pollution problem for coastal nations. Putting CO2 emission second, however, was not popular, especially with climate activists.
Given the criticism, in 2018, the IMO embraced a greenhouse gas (GHG) emissions reduction plan calling for a 50% cut from 2008 levels by 2050. Even then, climate catastrophists demanded a 100% reduction by 2050. Forget whether such a target was or even is achievable. But in a world of virtue signaling, just saying you will get to net zero emissions by 2050 seems to be enough. Leave the details to others and ignore the costs until they bite the activists.
The relentless climate catastrophe talks of its boss, United Nations Secretary-General António Guterres, have driven the IMO’s actions. In July, it convened the 80th meeting of the Marine Environment Protection Committee (MEPC) with the mission to advance the IMO’s GHG reduction target. The committee agreed to reduce shipping’s GHG emissions to zero “by or around, i.e., close to, 2050.” The plan includes interim “checkpoints” ‒ cutting emissions by at least 20% but hopefully, 30% by 2030, and then by 70% if not 80% by 2040. Although cheered by some, the IMO’s agreement was called “wishy-washy,” “falls short of expectations,” and even “a great disappointment” by climate activists and their media friends.
Shortly after the meeting, we attended a webinar discussing various aspects of the IMO agreements plus the European Union’s (EU) ‘Fit for 55’ emissions reduction plan approved in 2021. The Fit for 55 plan, a template for the IMO’s new GHG strategy, includes various actions.
Extending the EU Emissions Trading System (ETS) to maritime transport, thereby capping maritime transport emissions as part of the overall ETS cap, creating a carbon price signal that should foster the reduction of GHG emissions in a flexible and cost-effective manner, and generating revenues to tackle climate change and encourage innovation.
Boosting demand for marine renewable and low-carbon fuels, by setting a maximum limit on the greenhouse gas content of energy used by ships calling at European ports and by encouraging zero-emission technology at berth (where boats stay in ports), with a technology-neutral approach.