Shipping Industry Emissions Reduction Impact on Climate Change

Fossil fuel emissions from shipping

“The International Maritime Organization adopted in April 2018 an emission target for shipping, which seeks to achieve reductions by at least 50 percent from 2008 levels by mid-century. Given shipping is outside of the framework of UNFCCC, this is a significant development that creates the much needed ‘interdependence between emitters’ which will be basis of global regulation.” 

Introduction

Climate Change is a global challenge faced by the humanity. It is a very complex problem and difficult to solve as it affects essentially all industrial sectors and almost all aspects of contemporary society. The international community is agreed that urgent action is needed to combat climate change in order to prevent detrimental effects for mankind.’ At the Cancun Climate Change Conference in November 2010, there was an agreement to aim to “hold the increase in global average temperature below 2 C above preindustrial levels.”2 At the same time, there continue to be differences of opinion about precisely what action is necessary to achieve these targets.
The 1992 United Nations Framework Convention on Climate Change  (UNFCCC)offers the principal framework for states to cooperate on this issue. However, it is not envisaged that all cooperation on climate change must take place under the auspices of the UNFCCC. Article 2(2) of the Kyoto Protocol expressly foresees that, “the Parties included in Annex I shall pursue limitation or reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from marine bunker fuels, working through the International Maritime Organization.”

Further, under the 2015 Paris climate agreement, the world committed to limit global temperature increase to well below 2°C, and to pursue efforts to hold the rise to 1.5°C. The plans to cut emissions 2 c under the Paris Agreement was not applied  for international shipping, and, unlike the aviation industry, the shipping industry initially has not agreed any sector-wide deal to stop its greenhouse gas emissions increasing.

In April, 2018 the  IMO adopted an emission target for shipping, which seeks to achieve reductions by at least 50 percent from 2008 levels by mid-century[1]. This was a ground breaking achievement which has brought Shipping under the Climate Change framework and strengthen  the efforts made under the Paris Agreement.

Interestingly, shipping is estimated to have emitted 1,046 million tonnes of CO , in 2007, which corresponds to 3.30% of the global emissions during 2007[2]. Further, it is estimated that more than 95 percent of global goods are transported on seagoing vessels. Fuel oil accounts for more than 50 percent of a ship’s operating costs. To make the business cost-effective, most of the world’s ship owners use degraded residue heavy fuel oil, which is popularly known as bunker fuel. These degraded fuels can produce significant amounts of black smoke, particulate matter, nitrogen oxides (NOX), unburned hydrocarbons (UHC), sulphur oxides (SOX), carbon monoxide (CO), and carbon dioxide (CO,) during the burning process in marine diesel engines, boilers, and incinerators. These substances contribute to the process of depletion of the stratospheric ozone layer, accelerate the greenhouse effect, and contribute to acid rain and other environmental hazards[3]. Therefore, the latest emission targets of the IMO

Part I discusses the provisions in the Kyoto Protocol relating to the emissions of GHG from marine bunker fuels. Part II discuses the theoretical discourses related to the CBDR principle and their relevance to the proposed legal instrument. Part III gives a short overview of international law relating to vessel-source and atmospheric marine pollution. Part IV gives a brief introduction to the negotiation in the IMO for a binding instrument for the reduction of GHG emissions from marine bunker fuels and the debate surrounding the implementation of the CBDR principle. Part V explores the possibilities of including provisions regulating GHG emissions from marine bunker fuels in the future implementing Protocol to the UNFCCC and the role of the CBDR principle in the negotiation process. Part VI examines how a market-based instrument for the reduction of GHG emissions from marine bunker fuels can solve the problem related to the implementation of the CBDR principle. Part VII discusses the mandate and competence of the IMO in the formulation of international regulations for the reduction of emissions of GHG from ships. Part VIII concludes that an alternative approach to the CBDR principle is needed for the maritime sector.

Greenhouse Gas Emissions from International Shipping

The increase in fuel consumption associated with growing seaborne trade has led to a rise in atmospheric emissions from international shipping, which has attracted growing global attention. This section examines the categories, statistics and impacts of GHG emissions from international shipping.

Relationship between Shipping and Green House Gases

The emission from shipping is divided into different categories namely, Emission from exhaust gases, Emission from refrigerants, Cargo emissions and other emissions[4]. Emissions from exhaust is considered to be a major contributor of GHGs emissions and for purpose of this paper discussion will be made on exhaust emissions which is generated from burning of fossil fuels  coming from main engines, boilers and incinerators of a ship.

The emissions from shipping industry is one of major challenge for mitigating climate change and it has been increasing in recent years at the high rate. It is estimated that by 2007, Co2 from international shipping reached 870 million tonnes, which accounted for 2.7 percent of global emissions of Co2[5]. In 2012, co2 emissions from international shipping were 2.2 per cent of global CO2 emissions. However, between the year 2007-2012, the average CO2 emissions for international shipping Industry were recorded as 2.6 percent of world CO2 emissions[6]. There was a decline of CO2 emissions from international shipping from 2.7 per cent of global CO2 emissions in 2007 to 2.2 per cent of global CO2 emissions in 2012 as a result of global economic crisis. Nonetheless, the emissions from the international shipping industry is expected to increase drastically because estimated rise in demand for maritime services.[7]

However, maritime emissions are expected to increase significantly due to projected growth in demand for maritime transport services. In absence of any aggressive regulatory policies GHGs are predicted to grow by 150-250 percent by 2050 compared with 2007[8]. These Statistics might have persuaded the IMO to introduce new emission targets to achieve reductions by at least 50 percent from 2008 levels by 2050.

The adverse impact of GHG from international shipping industry in addition to marine environment in transboundary context, GHG emissions from shipping also have distinct effect on environment. The adverse effects involve atmospheric composition, human health and climate, and by their nature transboundary and chronically accumulative. These adverse effects can be discussed in three categories.

Primarily, most ships emissions, excluding those in ports and in the proximity of coastlines, are emitted in or transported to the marine boundary layer (MBL) where they affect atmospheric composition negatively. Generally a ship emits locally at relatively high concentrations[9]. Therefore, once GHG emissions from shipping are injected into the atmosphere, they mix with the ambient air and become diluted. Meanwhile, these emissions are chemically transformed before new secondary species (such as ozone) are produced, and some of them are subsequently removed from the atmosphere by wet and dry deposition. As a result, the atmosphere’s composition will be affected[10].

Further, GHGs emissions from international shipping industry may also have adverse impact on human body by way of formation of ground-level ozone and particulate matter. It is also estimated that about seventy percent of emissions from international shipping happen within 400 km of the seashore parallel to international shipping routes[11]. In the present scenario, the emissions taking place in international sea routes, further travels inland and deteriorate the air quality causing air pollution and adversely affected the human health.

Lastly, emissions from shipping also have effect on climate-changing clouds and radiative forcing[12].As a residual product remaining at the end of the crude oil refining chain, heavy fuel oil (HFO) has been widely used by various ships due to its competitive price.137 However, the by-products of combustion from HFO, including CO2, black carbon (BC), nitrogen oxides (NOx), sulphur dioxide (SO2) and carbon monoxide (CO), produce significant impacts on cli- mate by means of various physical and chemical interactions[13].

It is beyond doubt can be stated that GHGs emissions from international shipping industry in transboundary in nature. The transboundary nature of emission from shipping industry makes it impossible to allocate responsibility to a specific country. The difficulty in dealing with emissions from international shipping can be understood a hypothetical situation : A ship was manufactured in America, owned by the Japanese but registered in Indonesia. It was hired by Vietnamese and received an order to carry bauxite from PNG to China. The Officers and Crew members of ship were Indians. The bauxite ore was subsequently processed to produce Aluminium for exports to UK. In this situation there will be argument that who will be responsible for the GHG emissions.

Identification of the Problem

The people around the world are observing swift physical and technological changes, moulding every aspect of mankind. Climate change  is affecting the surrounding and communities in more than one way and it has become one of most debatable issue around the world. There is ample evidence which shows that international shipping is contributing significantly in climate change[14].Since limiting climate change requires ‘substantial and sustained reductions’ of GHG emissions, the global community has turned its attention to mitigating these emissions[15]. The global community swiftly responded mitigation of Climate change through 1992 UNFCCC and its Kyoto Protocol and recently in Paris Agreement[16].Soon, the global community realised that the issue of Climate change cannot be addressed adequately without reducing emissions from international shipping industry and therefore, international shipping need be brought under the umbrella of regulatory regime[17]. Till date global regulatory initiatives  on addressing Greenhouse gases emissions from international shipping industry is carried under the purview of two parallel regimes namely international climate change initiatives and IMO initiatives for reduction of greenhouse gases[18].  Under the international climate regulatory process, the UNFCCC, its Kyoto Protocol and Paris Agreement, as well as their various Conferences of the Parties (COPs), the COPs serving as the Meeting of the Parties to the Kyoto Protocol (CMPs) and the COPs serving as the Meeting of the Parties to the Paris Agreement (CMAs), have been discussing this GHG issue since 1995. Within the IMO, Party members have been discussing and negotiating the approaches to regulating the GHG emissions issue since 1997 when the IMO adopted Resolution 8 on ‘CO2 emissions from ships’, which requested the IMO to undertake a study on GHG emissions from ships and consider feasible CO2 reduction strategies[19].

UNFCCC process has not achieved any substantial results for reduction of GHGs from international shipping[20]. Within the IMO not much concrete action has taken place prior to April, 2018 declaration although other sources of pollution has been adequately regulated by IMO i.e. ballast water etc. Nonetheless, some minute steps were taken by the IMO to partially deal with issue of GHGs. On 15 July, the IMO adopted amendments to Annex VI to MARPOL 73/78 which deals with technical and operational areas. The amendment mandates the Energy Efficiency Design Index (EEDI) for new ships and the Ship Energy Efficiency Design Index (SEEMP) for all ships, which was the first attempt by any international institution to compulsory mitigate greenhouse gases[21]. Nonetheless, this step was highly debated as whether this measure will make any dent in mammoth contribution of shipping industry in greenhouse gases and whether the IMO should explore market based measures[22]. Though the IMO again in April, 2014 tried to further strengthen the Climate change regime by adopting further amendment of Annex VI to MARPOL 73/78[23].

The aim of the international community in mitigating climate change as per the Paris Agreement is to hold global average temperature increase to “well below 2°C above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. It is pertinent to mention that as per a report of  Asian Development Bank in 2013 a rise of  2 C by mid-century is ‘almost unavoidable’.[24]

Due to predicted growth of international trade through  shipping industry, the contribution of greenhouse gases from shipping will  significantly rise affecting human health, environment and climate change[25].As such, a study suggests that compared with 1990, an approximately 50:50 chance of avoiding two degrees demands a 70–80 per cent reduction in emissions from energy by 2050[26]. Therefore, it is out most important to adopt aggressive measures to mitigate greenhouse gases from international shipping. The IMO 2011, amendments to Annex VI to MARPOL  73/78 are the first mandatory reduction measure of GHGs, but unfortunately this measure was not adopted by consensus and only came into force on January, 2013.[27]

IMO, UNFCCC, Shipping Industry and Climate Change

As discussed in the last section that there are two regimes to address the issue of greenhouse gases namely climate change regime under the UNFCCC and IMO regime. In this section we will try to understand IMO as an international body competent to mitigate GHGs from shipping and why reduction of GHGs from shipping is not within the framework of the UNFCCC and regulation of GHGs under domestic legislation.

Regulation of emissions from shipping under the UNFCCC

The regulation for emissions generating from burning of fossils in ships can be found in older  agenda pertaining to climate change under the UNFCCC umbrella[28]. Despite considering importance of  regulation of emissions from fossil fuels in international shipping industry it was excluded from Kyoto Protocol targets in 1997. The basic rational behind this decision can be understood from difficulties which can be faced while allocating responsibility for mobile emissions on a country to country basis[29].

The achievements of targets and compliance of commitments of member State is reported under the UNFCCC reporting obligations and under the reporting obligation emissions from domestic aviation and shipping are reported member State in their inventories under national aggregate and are subject to national emission limitations and reduction commitments. It is pertinent to mention that emissions from International Bunker Fuel (IBF) or ship’s fossil fuels are not covered under the national scope and are communicated distinctly[30]. To address this issue, the member States consented to a proposal which  contended that the fossil fuels would be calculated on the basis of the country where the fuel is sold, whereas this formula of reporting was not meant to reflect responsibility for associated emissions[31]. It cannot be assumed that the UNFCCC completely ignored this problem, the UNFCCC through its subsidiary body for Scientific and Technological Advice attempted to improve the shortcomings[32].

The parties  to the Kyoto Protocol in 1997  agreed that the emissions from the international shipping is outside the scope of the agreement[33]. The Article 2.2[34] of the Kyoto Protocol expressly excludes not only excludes emissions from international shipping but also emissions generated from international aviation sector[35]. The UNFCCC through Kyoto Protocol appoints International Civil Aviation Organisation (ICAO) and International Maritime Organisation (IMO) respectively to deal with the issue of emissions from ships and planes[36]. The primary cause for this step can be understood from the disagreement between the parties on distribution of responsibility on these complicated sources of emissions. It can be stated that Article 2.2 was inserted in the agreement to subdue the controversy and bring the parties at a mutual consensus for success of  reduction targets.

The Article 2.2 of the Kyoto Protocol recognises the ICAO and IMO as an expert body possessing special knowledge to deal with the emission from shipping and aviation sector and their jurisdiction under the International Law[37]. However, even if a multilateral solution was envisioned in the Kyoto Protocol by assigning responsibility to ICAO and the IMO to tackle emissions, Article 2.2 does not appoint exclusive authority or precludes action outside these forums, whether multilateral or unilateral.

During the adoption of the Bali Action Plan at COP 13, few of the member States in regard to the Ad Hoc Working Group on Long -term Cooperative Action considered  chances of including emission from international shipping under the rubric of cooperative sector specific approaches and steps anticipated at Bali.  A negotiation document consisting of three alternatives was produced in 2009, with emission from fossil fuel in ships included in the document named ‘enhanced action on mitigation’.[38] The proposal was widely discussed and debated among the parties and most discussion centred around the role and responsibility of IMO and ICAO. Discussion were also made on the level of reductions, allocation of reduction based on sector but not on countries and consideration of developing countries. The outcome of the negotiation was not rewarding as though the parties agreed on the proactive role of IMO and ICAO under the guidance of UNFCCC but unfortunately, there no common consensus on the dispute as how to administer differential treatment to the fossil fuels emission from ships[39].

After the Bali Action Plan the global community was expecting crucial decision on emission from international shipping in the COP15, held in Copenhagen in December 2009 but unfortunately, no concrete decisions were concluded during the summit[40]. After sometime it was felt that the issue of emission from international shipping was lost in addressing other bigger issues regarding robust measure to mitigate  Climate change though during the summit few suggestion were made for sourcing  revenue from use of  fossil fuel in international shipping in Green Climate Fund[41]. The lack of agreement in the Ad Hoc Working Group on Long -term Cooperative Action  resulted in exclusion of three alternatives proposed during the COP15 in the document reported to COP16 for consideration. In 2011 a contact group was established with motive of easing consensus in the Ad Hoc Working Group on Long -term Cooperative Action on fossil fuels emissions from international shipping. The document produced by the contact group in 2012 also contained discrepancies. Nonetheless, the parties though agreed on the point that there should be consideration on the issue of  emission from international shipping and aviation and the responsibility was reassigned to the Ad Hoc Working Group on the Durban Platform for Enhanced Action. During the 2012, COP18 in Doha the parties were majorly involve on the issue of how to reconcile differential and equal treatment especially with regard to distortion of competition and therefore the issue of  fossil fuel emission from international shipping was considered in the agenda. Though the European Union pointed out that fossil fuel emission for international shipping may be considered for intensifying 2020 goals. The parties also submitted that consideration of fossil fuel emission from shipping will strengthen mitigation measures for climate change,  fill the emission gap and substantially contribute to climate fund.[42]

The next big development in climate change regime took place in Paris in the year 2015. The UNFCCC was envisage with most challenging responsibility of formalising an appealing global climate agreement. The UNFCCC learning from its past experience and failures tried to make an agreement which is free from the controversies and disputes and removed. While drafting the agreement, UNFCCC removed the provisions which they considered are not essential and may cause disagreement among the parties which included provisions for regulation of  fossil fuel emissions from ships[43].The reasons given for not including fossil fuel emissions from ship include international shipping not being important economic sector  for all the parties and for those parties for whom shipping in as important sector disagreement on the proposals. The another reason for excluding shipping is different treatment to developing and  development countries under the Article 2.2 of the Kyoto Protocol[44].

It is strongly believed that Paris Agreement was missed opportunity for strengthening the regulatory regime on fossil fuel emissions from ships. Further, UNFCCC during Paris Agreement could have clarified the complexities faced by the IMO due to Common but differentiated responsibility provided under the Article 2.2 of the Kyoto Protocol[45]. Essentially, the conjunction between the climate change  and IMO regime is unsettled which has given rise to number of conflicts and debates in the global community[46]. Without clear distinctions on the issue of fossil fuel emissions of shipping four major conflicts have been identified namely lack of clarity on apex forum to deal with this sector, disagreement on application of principle to deal with this global pollutant, solve the conflict on different treatment to develop and developing countries and adoption of type of mechanism i.e. market based mechanism[47]. UNFCCC could have dealt with this issue expediently under the Paris Agreement by clarifying on relationship between the climate change and IMO regime and interpreted the scope of the Article 2.2 of the Kyoto Protocol[48].

Green House Gases and domestic legislations

Globally greenhouse gases emissions  from the ships are regarded as ‘conditional pollution’ and many countries have drafted their domestic legislation included GHGs as a pollutant including GHGs emissions from shipping. Few of the countries listed in Annex I of the UNFCCC have included GHGs as pollutant while majority of non-Annex I countries has not included GHGs as pollutant in their domestic legislations.[49]

The United States of America is one of the few countries which have adopted GHGs as air pollutants[50]. The Clean Air Act is one of the most important environment legislation of the United States which provides that the Environmental  Protection Agency (EPA)   should work in “preventing and reducing multiple air pollutants, including sulphur oxides, nitrogen oxides, heavy metals, particulate matter, carbon monoxide and carbon dioxide from stationary sources including fossil fuels plants”.[51]

The noticeable fact is that the GHG, carbon dioxide  is regulated as air pollutant under the Clean Air Act. While it is pertinent to clarify that the provision of Clean Air Act on regulates carbon dioxide from stationery sources  , it appears that the legal nature of CO2 as air pollution will not change when the CO2 emissions are from mobile sources (e.g., ships). Which can be understood from definition of air pollutant from the Clean Air Act. The Act defines  ‘air pollutant’ as ‘any air pollution agent or combination of such agents, including any physical, chemical, biological radioactive (including source material, special nuclear material, and by-product material) substance or matter which is emitted into or otherwise enters the ambient air’.  The interpretation of this definition implies that the legal nature of carbon dioxide is not going to change irrespective of it being from mobile sources or stationary sources.[52] Interestingly, the EPA of the Unites States in 2009 declared that carbon dioxide and five other greenhouse gases are harmful to environment and public health and therefore it should regarded as ‘dangerous pollutants’.[53] Further, the New Jersey State Department of Environment Protection in 2005 , under the power conferred in its domestic legislation i.e. Air Pollution Control Act of  New Jersey identified carbon dioxide as a pollutant.[54] This has granted  power to the regulating agency to take endeavour for controlling CO2 emissions.

The courts play a very vital role in environment jurisprudence and in some of the countries environment legislations are outcome of judicial precedents.[55] In regulation of GHGs the most discussed case is United States case Massachusetts v. Environment Protection Agency[56] in which the Supreme Court of United States held that the EPA has the authority to regulate GHG emissions on plea filed by the environmental organisations and the State of California. The Attorney General of California requested the Supreme Court to direct the EPA to regulate emissions also from the ships.[57] The Supreme Court later entertained similar petitions filed on the issue of regulation of greenhouse gases from other sources including from shipping activities[58]. This has further strengthen the efforts to bring the reduction of greenhouse gases from shipping under domestic legislation.

In Australia, GHG emissions are not expressly  regulated as air pollutant under the domestic framework, although it is now has been regarded as pollutant under few proposed projects. The most popular scheme proposed by the Australian Government in 2009 was the Carbon Pollution Reduction Scheme which introduced emission capping and trading scheme.[59] The scheme was similar to the United States emissions trading scheme in which prices were imposed for emitting carbon. The CPRS is also considered as processor of Carbon Tax Scheme in Australia.  The CPRS was opposed a large section of the society including the Member of Parliaments and failed to generate public support. Nonetheless, the title of the scheme suggest that the policy makers of the Australia treated GHG as a pollutant and progressive steps may be taken in future to explicitly include GHG as a pollutant under national legislation.

India and China two largest developing countries of the world  has not regulated GHG emissions under the domestic legislations as compare to the United States and Australia.[60] The definition of air pollutant under the Environment Protection Law and Air Pollution and Prevention and Control Law is not been provided and it is anticipated that greenhouse gases will not be regulate under the Chinese law in near future[61]. It was debated that including GHG as a pollutant might create hurdle for economic growth for China’s growing economy[62].

The situation in India is slightly different as compare to China, the air pollution is regulated under the Air (Prevention and Control of Pollution) Act, 1981 and Environment Protection Act, 1986. The Air Act, 1981 gives a wide definition to air pollutant and states “air pollutant means any  solid, liquid or gaseous substance  [(including noise)] present in the atmosphere in such concentration as may be or tend to be injurious to human beings or other living creatures or plants or property or environment”.  The Air Act expressly regulates vehicular pollution and grant power to the State Government and State Pollution Control Board to give direction to appropriate authority under the Motor Vehicle Act for ensuring standard of emissions of air pollutants. Although, the parameters  given under the Environment Protection Act, 1986  does not include carbon dioxide.  The Indian courts has been very active ensuring safe and pollution free environment. In fact the Supreme Court of India interpreted  that the Right to Life also includes Right to Environment under the constitution of India.[63] The Supreme Court of India and the National Green Tribunal has passed several directions for  banning polluting vehicles but all these direction were passed on basis of adverse impact of  polluting vehicles and not greenhouse gases emissions[64]. It is though possible that Indian courts may in future interpret the definition of air pollutant under the Air Act, 1981 and also explicitly includes greenhouse gases as pollutant. Other developing countries like Brazil, Mexico, Indonesia have also not regulated GHG under their domestic legislations.

In summary it might be understood that GHG emissions emission from international shipping industry might be treated as ‘Conditional Pollutant’. Though there is a lot of scope for various countries to adopt and amend their legislations to include GHG as emissions and regulate it under domestic framework.

IMO as a competent body

The International Maritime Organization, known as the Inter-Governmental Maritime Consultative Organization until 1982[65] was established by the States as an expert body under the United Nations to facilitate intergovernmental cooperation in regulation of ship engaged in international trade[66].   The IMO is entrusted with wide number of responsibilities including ensuring safety at land and sea and measures for control of pollution from shipping activities. In its mission statement the IMO has declared

“The mission of the International Maritime Organization (IMO) as a United Nations specialized agency is to promote safe, secure, environmentally sound, efficient and sustainable shipping through cooperation. This will be accomplished by adopting the highest practicable standards of maritime safety and security, efficiency of navigation and prevention and control of pollution from ships, as well as through consideration of the related legal matters and effective implementation of IMO’s instruments with a view to their universal and uniform application[67].”

The IMO is also responsible for setting up of global standards on safety, security and environment compliance of the international shipping industry. The IMO being a specialised body covers all regulatory framework on technical issues regarding safety of ships, quality of navigation, prevention and control of air and marine pollution from shipping activities. Initially, IMO only focused control of marine pollution arising from oil spills, discharge of  untreated sewage and ballast water and to deal with this problem the IMO adopted the MARPOL convention in 1973[68]. The IMO regulates the shipping industry through a system of treaties that promote technical rules which are needed to be endorsed into domestic legislation of its member parties[69]. The IMO mainly have four schemes under which shipping activities are regulated namely : (a) the IMO Convention (b) a wide ranging Safety of Life at Sea Convention (solas) framework (c) the MARPOL Convention, 1973 and (d) decree like measures prescribed by the IMO’s Marine Environmental Protection Committee.[70]

It is argued that the IMO’s jurisdiction to regulate GHG emissions from international shipping draw comes from IMO Convention, UNCLOS and Kyoto Protocol[71]. It can be understood that IMO Convention and UNCLOS  provide the IMO regular power to greenhouse gases from international shipping while the Kyoto Protocol gives specific power to regulate the pollutant[72]. Presently, there are three schemes under which IMO regulates the greenhouse from international shipping namely: operational measures, regulating measures and market based measures.[73]. In the current system as mentioned earlier the IMO possess special knowledge enshrined with research and innovations  to regulate technical and operational measures and it is justified to state that no other international agency possesses the IMO’s technical expertise[74] and this confirmed from the stand taken by the global shipping industry which includes national shipping industries from the UNFCCC;s non Annex I States that IMO is the sole competent agency to regulate this issue from technical and operational perspective.[75] As mentioned earlier the IMO under its technical and operational measures included energy efficiency norms in the amended Annex VI of MARPOL 73/78 in July 2011[76]. In the light on the discussion made and power vested  under the Kyoto Protocol, it is not wrong to conclude that the IMO is the sole body globally to regulate GHGs from the international shipping industry.

There is little doubt on the role of the IMO in adopting market based mechanism to deal with greenhouse gases as some of these measures involve global emissions reduction from different sectors[77] and also goes beyond the technical matter of the shipping. In theory the authority that the IMO has under the Kyoto Protocol as provide it the competence for such work. Nonetheless, the Article 2.2 of the Kyoto Protocol is ambiguous as it does expressly recognise the exclusive competence of the IMO or provide the exact measures IMO can adopt to mitigate greenhouse gases from international shipping. To put an end to this controversy in 2011, the International Chamber of  Shipping requested the participants in the Durban Climate Change Conference to give the IMO a clear mandate to reduce greenhouse gases through market based mechanism[78]. Although no clarity was provided during the Durban Conference. Furthermore, the Paris Agreement also decided to skip this controversial issue as discussed earlier. It might be possible that in future in order to regulate market based mechanism involving numerous sector emissions reduction and international trade, the IMO may work together with international organisation such as UNFCCC and World Trade Organisation, due to their boarded competence and expertise in international trade.

Shipping Industry

The regulation of GHG emissions from international shipping industry is a very complicated process which involves States and non-States with their own interest both politically and economically[79]. The response and cooperation from shipping industry is very important in integrating its sectoral concern into the IMO’s regulation. The representatives from the shipping sector, especially the respective shipping associations that have consultative position with the IMO as a NGO,  have time and again influenced the policy making through debates and discussions[80]. Compulsory as well as advisory regulations of the  IMO cannot be enforced effectively without the cooperation of the shipping industry and therefore, active participation of shipping industry is required to successfully implement greenhouse gases regulation measures.  The shipping industry is classified into different group and subgroups but broadly divided into cargo sector and cruise sector and hence represented through respective associations. These associations at consultative status at the IMO respond through suggestions and feedback during adoption of new instrument which also applies for formulating instruments for GHG reductions.

The international as well as the regional shipping organisations supported the IMO initiatives in reduction greenhouse emissions from ships from time to time[81] In fact the recent effort of the IMO to reduce emission by 50% by 2050 was well supported by the shipping industry[82].  Although, there is difference of opinion on the adoption of measures, few  of the organisations support operational measures while some of the organisations support technical measures[83].

The shipping industry also contributed to the further reduction of  the greenhouse gases, including extending the coverage of the Energy Efficiency Design Index to include most types of new ships, further strengthening the implementation of adopted Energy Efficiency Design Index and Ship Energy Efficiency Management Plan improving energy efficiency of the ships[84]. In respect to the much debated market based mechanism most of the international ship operators and associations favour a GHG Fund or levy-related market based mechanism be applied to the GHG issue, while the fossil fuel sector favour an Emission Trading System.

At the domestic scenario, the respective shipping industries from around the world  favour the reduction of GHG emissions from shipping industry by regulating the Energy Efficiency Design Index and Ship Energy Efficiency Management Plan measures.[85] The major disagreement among the domestic shipping industry is regarding the market based mechanism measures. Ordinarily, the UNFCCC Annex I states support the favour the endorsement of market based mechanism but differ in their preferred market based mechanisms[86] Australia and United Kingdom backs Emission Trading Scheme and welcome the application of Common but Differentiated Responsibility while Greece support a GHG Fund or levy relevant market based mechanism. The non-Annex I States under the UNFCCC have their own dissents, the Korean shipping industry prefers a  GHG Fund or levy relevant market based mechanism while on the other hand world’s two biggest States India and China believe that it is still premature to adopt any market based mechanism at this stage. It can be understood that the willingness of State’s shipping industry to endorse market based mechanism depends on the development stage of the State. The developed countries are better equipped with technologies and therefore adopting market based mechanism is attractive to them. Moreover, as more developed countries and shipping associations reckon the application of both Common but Differentiated Responsibility and No more Favourable Treatment Principles to the global regulation of GHG emissions from shipping industry[87]. Whatever will be the course of action in the future one thing is clear that reduction of GHGs from the shipping cannot be implemented effectively without the cooperation and support of the shipping industry.

Analysis of the new emissions of the IMO

The IMO’s Marine Environment Protection Committee during its 72^nd meeting adopted a landmark resolution codifying an initial greenhouse has strategy for international shipping[88]. The strategy adopted by the IMO is first of its kind which has explicitly brought the greenhouse gases emissions from international  shipping under the climate change regime by establishing  quantitative GHG reduction target by the midcentury and it    consist a list  of potential short, mid and long term policy measures to help achieve these targets.[89] This unique strategy indicate that the international shipping industry in coming years will absorb approximately 3.8 % to 5.8% of the earth’s remaining budget under the Paris Agreement, up from 2.3% in 2015[90].

The IMO in its resolution stated that their vision is a qualitative description of IMO’s ambition. The resolution further provides that  “IMO remains committed to reducing GHG emissions from international shipping and, as a matter of urgency, aims to phase them out as soon as possible in this century.” The strategy incorporates quantitative carbon intensity and GHG reduction targets for the international shipping sector including At least a 40% reduction in carbon intensity by 2030 and pursuing efforts towards a 70% reduction by 2050, both compared to 2008 levels.[91] Furthermore, the IMO aims to peak GHG emissions from international shipping as soon as possible and reduce them by at least 50% by 2050 compared to 2008 levels while pursuing efforts towards phasing them out consistent with the Paris Agreement temperature goals[92].

As stated above the IMO’s initial GHG strategy is a landmark effort by the global community to regulate greenhouse gases from the international shipping industry and therefore, it will have huge impact on the maritime transport which is responsible for transportation of  about 90% of international trade[93]. It is important to understand the implication of this strategy on overall emissions trajectory, impact on measures to improve fuel efficiency and the treatment of climate pollutants other than CO2.

As per the International Energy Association, in order for international shipping to contribute equally to the Paris Agreement goal of limiting anthropogenic warming to well below 2 °C, shipping must emit no more than 17 Gt CO2 in total from 2015 onward[94]. The IMO targets allow a total of between 28 and 43 Gt CO2 to be emitted by international shipping through 2100. Thus, IMO’s initial GHG strategy suggests an emissions trajectory that overshoots a 1.75 °C pathway by between 65% and 150%. In this case, international shipping would consume between 3.8% and 5.8% of the world’s remaining Paris-compatible carbon budget, compared to 2.3% of anthropogenic CO2 emissions today[95].

Under the strategy’s operational efficiency target, the carbon intensity of international shipping would fall 40% by 2030 from 2008 levels and by up to 70% in 2050. As of 2015, the carbon intensity of international shipping has already dropped by more than 30% from 2008 levels. This was primarily due to the 2008 global economic downturn which encouraged widespread slow steaming to reduce fuel consumption and, therefore, fuel costs. Based on trends in international shipping emissions and demand, combined with fleet renewal under the EEDI, shipping’s carbon intensity is likely to fall by at least another 10 percentage points by 2030 without further policy interventions. Similarly, the goal of reducing 2050 emissions by half compared to 2008 levels implies reductions in carbon intensity greater than 70% target. The minimum ambition targets above imply significant improvements to the design efficiency of new-build ships. Under the scenario where IMO works to implement short-, mid-, and long-term measures (Figure 2, left), EEDI targets are tightened gradually from -30% in 2022, to -40% in 2025, up to -70% in 2040. If the IMO only focuses on long-term measures , EEDI targets are increased much more steeply, from -50% in 2035 up to -90% in 2045. This is in addition to widespread adoption of low-carbon fuels for zero emission vessels which, in this scenario, would account for two-thirds of all shipping energy use in 2070

IMO’s agreement explicitly concerns CO2 and calls for considering measures to address emissions of methane and volatile organic compounds, but not other climate pollutants such as nitrous oxide or black carbon. Black carbon, in particular, is estimated to account for 7% to 21% of the overall climate impact of international shipping.10 Separate action on black carbon is being considered in IMO’s Pollution Prevention and Response (PPR) Subcommittee. NEXT STEPS Now that the initial strategy has been finalized, IMO will consider which, if any, of the short-term measures should be made mandatory. An additional intersessional working group, ISWG-GHG 4, is planned for later this year, focused on developing an implementation plan for short-term measures. Separately, MEPC will deliberate whether to tighten the existing EEDI standards for new-build ships at its next two meetings. The phase 3 targets of 30% efficiency improvement by 2025 are currently under review and could be implemented soon, subject to a decision expected at MEPC 73 in October 2018. A separate decision on whether to institute new EEDI phases will be considered at MEPC 74 in 2019.

Furthermore, the aforementioned targets are not accompanied by a non-compliance mechanism. Hence, doubts remain as to how the IMO would address cases of non-compliance by its member states. Moreover, it appears that even in full compliance with such targets, the emissions trajectory would be inconsistent with the 1.5° target, completing closing the door on this prospect.

Conclusion

In conclusion, it can be said that IMO’s GHG strategy is indeed an ambitious and solid step forwards towards tackling emissions from international maritime shipping. A revised strategy will come in 2023. This time period will with all likelihood be enough to assess whether the strategy will have a real impact on maritime emissions, and what levels of compliance can be expected.

[1] ‘U.N. Shipping Agency Reaches Deal to Cut CO2 Emissions’ Reuters, 13 April 2018 .

[2] Md Saiful Karim and Shawkat Alam, ‘Climate Change and Reduction of Emissions of Greenhouse Gases from Ships: An Appraisal’ (2011) 1 Asian Journal of International Law 131.

[3] Ibid.

[4] Yubing Shi, Climate Change and International Shipping (Brill, 2016) .

[5] Karim and Alam, above n 2.

[6] Shi, above n 4.

[7] YH Venus Lun et al, ‘Measures for Evaluating Green Shipping Practices’ in Green Shipping Management (Springer, Cham, 2016) 31 .

[8] Shi, above n 4.

[9] Lun et al, above n 7.

[10] Shi, above n 4.

[11] Ibid.

[12] Definition, radiative forcing is a direct measure of the amount that the Earth’s energy budget is out of balance, David L. Chandler, Explained: Radiative Forcing, MIT News, March 10, 2010   .

[13] Shi, above n 4.

[14] Karim and Alam, above n 2.

[15] Alan Boyle and Navraj Singh Ghaleigh, ‘Climate Change and International Law beyond the UNFCCC’ [2016] The Oxford Handbook of International Climate Change Law .

[16] Ibid.

[17] Karim and Alam, above n 2.

[18] Shi, above n 4.

[19] Ibid.

[20] Boyle and Ghaleigh, above n 15.

[21] Shi, above n 4.

[22] YH Venus Lun et al, ‘Development of a Green Shipping Network’ in Green Shipping Management (Springer, Cham, 2016) 61 .

[23] Shi, above n 4.

[24] Lun et al, above n 22.

[25] Karim and Alam, above n 2.

[26] Shi, above n 4.

[27] Ibid.

[28] Beatriz Martinez Romera, ‘The Paris Agreement and the Regulation of International Bunker Fuels’ (2016) 25(2) Review of European Comparative & International Environmental Law 215.

[29] Ibid.

[30] Edmund Hughes et al, ‘Control of Emissions to Air from International Shipping’ (2017) 31(1) Ocean Yearbook Online 452.

[31] Martinez Romera, above n 28.

[32] Ibid.

[33] Hughes et al, above n 30.

[34] Article 2.2 -The Parties included in Annex I shall pursue limitation or reduction of emissions of greenhouse    gases not controlled by the Montreal Protocol from aviation and marine bunker fuels, working through the International Civil Aviation Organization and the International Maritime Organization, respectively

[35] Hughes et al, above n 30.

[36] Martinez Romera, above n 28.

[37] Ibid.

[38] Ibid.

[39] Ibid.

[40] Boyle and Ghaleigh, above n 15.

[41] Martinez Romera, above n 28.

[42] Ibid.

[43] Ralph Bodle, Lena Donat and Matthias Duwe, ‘The Paris Agreement: Analysis, Assessment and Outlook The Paris Agreement: Rebooting Climate Cooperation’ (2016) 2016 Carbon & Climate Law Review (CCLR) 5.

[44] Ibid.

[45] Martinez Romera, above n 28.

[46] Ibid.

[47] Ibid.

[48] Bodle, Donat and Duwe, above n 43.

[49] James Harrison, ‘Recent Developments and Continuing Challenges in the Regulation of Greenhouse Gas Emissions from International Shipping Maritime Transport and Security’ (2013) 27 Ocean Yearbook 359.

[50] Richard Hildreth and Alison Torbitt, ‘International Treaties and U.S. Law as Tools to Regulate the Greenhouse Gas Emissions from Ships and Ports’ (2010) 25 International Journal of Marine and Coastal Law 347.

[51] Shi, above n 4.

[52] Ibid.

[53] Hildreth and Torbitt, above n 50.

[54] Ibid.

[55] Ayesha Dias, ‘Judicial Activism in the Development and Enforcement of Environmental Law: Some Comparative Insights from the Indian Experience’ (1994) 6 Journal of Environmental Law 243.

[56] ‘Massachusetts et Al. v. Environmental Protection Agency et Al.’ (2006) 549 U.S. 497.

[57] Shi, above n 4.

[58] Ibid.

[59] Bruno Zeller and Michael Longo, ‘Carbon Reduction Legislation in Australia – What Next’ (2011) 8 Macquarie Journal of Business Law 182.

[60] Shi, above n 4.

[61] Yubing Shi, ‘Greenhouse Gas Emissions from International Shipping: The Response from China’s Shipping Industry to the Regulatory Initiatives of the International Maritime Organization’ (2014) 29 International Journal of Marine and Coastal Law 77.

[62] Ibid.

[63] Furqan Ahmad, ‘ORIGIN AND GROWTH OF ENVIRONMENTAL LAW IN INDIA’ (2001) 43(3) Journal of the Indian Law Institute 358.

[64] Armin Rosencranz and Geetanjoy Sahu, ‘Assessing the National Green Tribunal after Four Years’ (2014) 5 Journal of Indian Law and Society 191.

[65] History of IMO, International Maritime Organization.

[66] Hughes et al, above n 30.

[67] History of IMO, above n 65.

[68] Hughes et al, above n 30.

[69] Jeffrey J Smith and M Tanveer Ahmad, ‘Globalization’s Vehicle: The Evolution and Future of Emission Regulation in the ICAO and IMO in Comparative Assessment’ [2018] (Issue 1-2) Climate Law 70.

[70] Ibid.

[71] Yubing Shi and Warwick Gullett, ‘International Regulation on Low-Carbon Shipping for Climate Change Mitigation: Development, Challenges, and Prospects’ (2018) 49(2) Ocean Development & International Law 134.

[72] Ibid.

[73] Shi, above n 4.

[74] Ibid.

[75] Ibid.

[76] Shi and Gullett, above n 71.

[77] Shi, above n 4.

[78] Ibid.

[79] Lun et al, above n 7.

[80] Shi, above n 4.

[81] Ibid.

[82] Carbon Emissions from Global Shipping to Be Halved by 2050, Says IMO (13 April 2018) The Independent .

[83] Shi and Gullett, above n 71.

[84] Shi, above n 4.

[85] Shi and Gullett, above n 71.

[86] Ibid.

[87] Shi, above n 4.

[88] ‘U.N. Shipping Agency Reaches Deal to Cut CO2 Emissions’, above n 1.

[89] Ibid.

[90]‘ Dan Rutherford, Bryan Comer‘The International Maritime Organization’s Initial Greenhouse Gas Strategy, (23 April 2018)  | International Council on Clean Transportation’ .

[91] ‘U.N. Shipping Agency Reaches Deal to Cut CO2 Emissions’, above n 1.

[92] Dan Rutherford, Bryan Comer’, above n 90.

[93] Shi and Gullett, above n 71.

[94] Ed King, ‘How Shipping Threatens the Paris Climate Agreement’ .

[95] Ibid.