GHG Emissions Reduction from Ships

The Greek shipping community is committed to shipping’s decarbonisation and continues to support global policies based on sustainable and viable solutions adopted at the IMO. Regional measures that do not recognise the international character of shipping hinder maritime transport and world trade and are suboptimal in the combat against global warming.

The UGS welcomes the 2023 IMO Greenhouse Gas (GHG) Strategy on the reduction of GHG emissions from ships. This historic agreement includes a net zero target by or around 2050, as also proposed by the industry, and ambitious indicative checkpoints for 2030 and 2040. Availability of alternative drop-in fuels that are safe and fit for purpose will be vital in enabling the existing fleet to achieve the revised decarbonisation pathway, especially given the short time to the 2030 checkpoint.

The UGS supports the shipping industry’s proposal for a “Fund and Reward” system. The “Fund and Reward” mechanism, will be financed by a mandatory contribution by ships per tonne of CO2 emitted to an IMO fund, as proposed by the International Chamber of Shipping (ICS). It will disincentivise ships from emitting carbon and reward ships that use fuels and technologies restricting CO2 emissions. A technical Global Fuel Standard, similar to the IMO 2020 Sulphur Regulation, is also needed to supplement the economic measure in a way that minimises the administrative burden especially on the shipping industry’s Small and Medium-sized Enterprises (SMEs).

Combining a global “Fund and Reward” scheme with a Global Fuel Standard as a technical measure will be effective in achieving shipping’s global environmental goals.

The IMO has also adopted short-term measures aimed at improving the energy efficiency of existing ships and reducing the carbon intensity of international shipping with effect from 1.1.2023. These measures include technical (Energy Efficiency Existing Ship Index - EEXI), operational (Carbon Intensity Indicator - CII) and administrative reporting (Ship Energy Efficiency Management Plan - SEEMP) requirements. These measures are in addition to the Energy Efficiency Design Index (EEDI) which has been in force globally for newly built ships since 2013.

Still, the package of short-term measures comes with imperfections. This is because the CII framework seeks to reduce the emissions from ships through the implementation of operational measures which are unrealistic and often out of the shipowners’ control. The operational decisions that mainly affect the parameters of the ship’s CII rating (e.g. ship’s speed, itinerary, routeing, cargo, refueling) are more often than not, taken by the commercial operator/charterer of the ship. The IMO is committed to addressing concerns surrounding the CII Regulation during the review period which ends in 2026.

The CII framework needs substantial improvement as it is not fit for purpose for many ship types and their modus operandi.

The role of out-of-sector stakeholders

Ιt is imperative that a balanced approach is followed between ambitions and realism, taking also into account energy supply and demand requirements. Decarbonisation entails a new generation of zero-carbon fuels and propulsion technologies. Ocean-going shipping is a hard-to-abate sector and relies on the availability of high energy density marine fuels at affordable prices and abatement technologies, which, however, have not yet become viable. This is one of the reasons why the UGS remains technology neutral, while showing a preference for drop-in fuels which are compatible with existing Internal Combustion Engines (ICEs) and existing bunkering infrastructure.

The investments in fuel production and in supply infrastructure represent by far the biggest share of the total cost of decarbonisation. The development of alternative fuels and technologies requires the contribution and coordination of a wide range of out-of-sector stakeholders, such as fuel producers and suppliers, shipyards, marine engine manufacturers, ports and terminals, charterers, financial institutions, regulators and governments in order for international shipping to have access to safe and fit for purpose propulsion technologies and marine fuels available worldwide.

The decarbonisation of shipping requires out-of-sector stakeholders to commit to the urgent development of alternative and safe marine fuels and technologies.

Safety first: the underlying principle for all regulations

The safety of the new fuels and emerging technologies is of paramount importance for shipping. The preservation and the improvement of the existing safety levels have to be guaranteed. This brings the IMO Maritime Safety Committee (MSC) at the forefront to ensure that equipment and procedures onboard and ashore offer at least the same safety levels as is presently the case with the universal use of fossil fuels. 

Safety should remain paramount as the overarching principle in all shipping regulations.