MEPC82: Economic Measures in Debate but IMO Confident Strategy Remains on Track

IMO secretary-general Arsenio Dominguez. Image Credit: Ship & Bunker

The shipping industry is unlikely to get the certainty it wants on the detail of the economic measures to reduce greenhouse gas emissions from shipping that are being discussed at International Maritime Organization headquarters in London this week.

The IMO's GHG strategy was agreed last year at MEPC80 but remains a work in progress in terms of the exact shape of the measures needed to make it work.

But IMO secretary-general Arsenio Dominguez told a press briefing on Monday he was confident that a pricing mechanism will be agreed by the next marine environment protection committee meeting in March (MEPC83). 

And outstanding details that still need to be finalised can be between MEPC83 and MEPC84, he added.

But in terms of what the specifics of the agreement will be, ultimately, this is for the member states to decide, he said.

Papers submitted to MEPC82 show that a fund to mitigate the impact of reducing shipping's GHG emissions, could be sizeable.

A potential $80 billion fund is possible (if the amount of equivalent carbon produced by shipping a year is multiplied by a higher price).

But Dominguez cautioned on the size of the fund [whether small, medium or large] saying that "the range will depend on the measure".

The size of the fund will have an impact by increasing the costs of shipping and commodities which, in turn, effects member states.

"We are not here to introduce a measure just for the sake of collecting a lot of money," Dominguez explained. Higher commodity prices would be seen negatively by member states and fleets.

But it would be possible for the IMO to administer the fund if that's what member states decided. 

The size of the fund will be determined by the price allocated to a metric tonne of carbon equivalent. That price range is also wide as can be seen in papers presented to MEPC82, varying from as little as $17.5 per tonne of carbon equivalent to as much as $180 per tonne of carbon equivalent.

"This is being looked at right now. And there are 20 different scenarios of different combinations of the measures."

The final decision on this will be one that brings the member states together and allows the IMO strategy to takes "its first steps", the secretary-general said.

MEPC82 is running at the IMO headquarters in London from September 30 to October 4. The IMO has currently has 176 member states and three associate members, according to its website.