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The IMO’s working group on greenhouse gases has decided that ships must improve their annual CO2 intensity by 2% annually between 2023 and 2027 but could not agree to a reduction in targets going through to 2030, which was the original goal. Next month’s IMO environmental committee needs to ratify the agreement for it to become official

GOVERNMENTS have preliminarily agreed to force ships to reduce their CO2 intensity by 2% annually between 2023 and the end of 2026, but failed to agree on further reductions through to 2030.

Countries at the International Maritime Organization agreed on Friday to the new reduction rate as part of a short-term measure that aims to help international shipping reduce its average CO2 intensity by at least 40% by 2030 compared with 2008.

The decision of the intersessional working group on greenhouse gas emissions, the IMO’s dedicated greenhouse gas group that meets behind closed doors, has to be approved by the IMO’s Marine Environment Protection Committee that meets from June 10 to June 17.

This 2% reduction rate between 2023 and 2026 is part of the carbon intensity indicator, a short-term operational efficiency measure that governments approved in November.

The carbon intensity indicator would come into effect in 2023 if it were to be adopted by the MEPC in June. The MEPC is also expected to adopt new technical efficiency requirements for the existing fleet, through a separate measure called the Energy Efficiency Existing Ship Index.

This 2% annual reduction of the carbon intensity indicator appears to be in relation to the annual efficiency ratio, which estimates carbon intensity based on fuel consumption, distance travelled and deadweight tonnage.

However, the goal this week was to agree to CO2 intensity reductions through to 2030, the target year for the 40% commitment.

An expert group led by China, Japan and the European Commission had suggested before the meeting that governments could meet the 2030 by opting for either 22% emission reductions target, in terms of a supply-based approach, or 11% from a demand-based approach, compared with 2019 levels.

But countries did not make a decision on this target, instead opting only for the annual CO2 intensity reductions, meaning that shipping companies will not have certainty over what requirements they will face in less than six years’ time.

The intersessional group’s agreement would see governments determine reduction requirements for 2027 to 2030 in 2026, when the IMO reviews the measure.

The roadmap seen by Lloyd’s List says that this third phase will be “further strengthened and developed taking into account the review of the short-term measure”.

The first phase of the agreed roadmap supposes a 1% annual CO2 intensity reduction until 2023.

Critics have warned that such a 2% reduction would allow shipping emissions to continue to grow over the next decade, even with these energy-efficiency improvements.

Supporters believe that the 2% can get international shipping to that 40% reduction target.

The IMO had agreed in its 2018 initial GHG strategy that it would seek to attain this 40% reduction target. But it had also committed to “peak GHG emissions from international shipping as soon as possible”.

Individuals from different delegations described this week’s negotiations as long and difficult, with political considerations creeping into what are considered by many to be technical issues.

Maersk head of regulatory affairs Simon Bergulf said the meeting showed what can happen when technical and legal measures come within a highly political agenda.

“As Maersk, we are happy to see that the IMO is one step closer to closing short-term measures, but we also share the frustration of many member states when it comes to the level of ambitions being too low,” he told Lloyd’s List.

He also said it was very difficult for any shipping company to get certainty or clarity on the effect of these measures as long as fundamental metrics such as the annual efficiency ratio and energy efficiency operational indicator — the demand-based metric of CO2 intensity — correction factors are not agreed upon.