It is back to the drawing board for the IMO. The industry leader faced harsh criticism following last month’s Marine Environment Protection Committee meeting (MEPC 76). The shipping sector has notoriously fallen behind other major industries in implementing green initiatives and unfortunately, discussions at MEPC 76 spurred little progress. The hope was to establish a clear path towards the IMO’s current emission target. That target will require the shipping industry to cut carbon emissions by 40% before 2030. In the short term though, MEPC members could only agree to reduce emissions by 11% between 2023-2026. Of course, the math there just doesn’t add up. The agreed proposal will only lower carbon intensity by 2% annually but experts estimate that at least a 6-7% drop in emissions is needed each year. At that rate, the maritime industry would be on track to reach climate neutrality by 2050 in line with the Paris Agreement. As it stands though, the IMO’s current strategy leaves only four years for shipping executives to make massive cuts to emissions.
There is no word on how the IMO plans to address this deficiency. What is clear is that emission targets cannot be reached while the shipping sector remains heavily reliant on fossil fuels. Industry executives need to come to a consensus on which green fuel will power the future and fast. Scaling the production of a new fuel and building new ships will take time. It also won’t come cheap. Studies estimate that decarbonization of the shipping sector will cost around US$2 trillion. The vast majority of that will go to fuel development and creating the infrastructure to match. Unfortunately, the IMO has made no progress in securing the necessary funding for such an enterprise. In doing so, they are failing to incentivize ship owners to make the move away from fossil fuels.
The sluggish pace towards decarbonization reveals a deep divide in the shipping sector. The IMO’s decision-making procedure requires unanimity among member nations and clearly all members are not on the same page. Nordic countries, Germany, the UK and the US have heavily advocated for emissions cuts but China, India, Brazil, and Russia have been more hesitant to agree to changes. Working through these concerns and coming to a consensus will be critical if the shipping industry expects to make any notable difference in emissions. Right now, the IMO’s lack luster plans won’t cut it. We need to make some serious changes before our goals become out of reach.