IMO MEPC Meeting Must Bring Regulation Clarity to Drive Green Fuel Production: IBIA

Edmund Hughes is IBIA's IMO representative. Image Credit: Edmund Hughes

Industry body IBIA is hoping to see the upcoming meeting of the IMO's Marine Environment Protection Committee bring new clarity on GHG regulations to add momentum to the shipping industry's energy transition.

Investors in decarbonisation projects will be waiting for more clarity on regulations before committing to new activity, Edmund Hughes, IBIA's IMO representative, said in an interview with Ship & Bunker.

Hughes worked for the IMO from 2010 to 2020, serving as its head of air pollution and energy efficiency from 2013 to 2020 as the organisation drew up its plan to impose a 0.50% sulfur limit on bunker fuel, as well as its initial strategy on the reduction of GHG emissions from shipping.

"We're at the point now where we need to start having agreement on some of the key policy questions," Hughes said.

"For IBIA -- because we are now representing the bunker fuel supply chain both directly to the ships but also increasingly upstream -- we need regulation to be clarified to then help create the demand drivers for these fuels.

"Without the demand drivers, we won't have the confidence for the investments.

"The big action needs to happen upstream: the investments, the supply chains, the production lines, the storage.

"These are all aspects that need to be reconfigured, and it needs to happen at the same time as we carry on supplying hydrocarbon fuels as we do now.

"The one thing MEPC 82 has to try and do, for me anyway, is to start trying to reduce some of the uncertainty over these policy questions.

"And the biggest one of all is the carbon price."

MEPC 82

The 82nd meeting of the MEPC is scheduled for September 30 to October 4. The IMO's current timeline for mid-term measures on the reduction of GHG emissions envisages these measures being approved at MEPC 83 early in 2025, before being adopted at MEPC 84 in 2026.

The key issue at hand is how to add a pecuniary cost to shipping's GHG emissions at a global level; whether and how to impose a carbon tax, and how to avoid this having an outsized economic impact on smaller nations heavily dependent upon shipping.

"If you look at all the various proposals, it would seem that there is a fair level of support for some sort of carbon price," Hughes said.

"The trouble is that you do have another set of governments who don't really want that, and they are some big players, frankly; I think consensus is going to be a challenge.

"That's my biggest concern."

IBIA has lent its support to an ICS proposal seeking to impose a new GHG intensity standard for bunker fuels. 

"We supported the ICS in terms of an absolute standard, similar to what you had for the sulfur limit," Hughes said.

"We just saw it worked for IMO 2020, so why should it not work for the GHG intensity?"

IBIA Convention

Hughes will be speaking at the IBIA annual convention in November, updating the membership on the latest developments in regulation after MEPC 82. The event will be held in Athens from November 5-7.

"From my perspective, the IBIA convention is a really good opportunity for us to review the outcome of MEPC," Hughes said.

"We'll have stakeholders from various parts of the supply chain, and it's a really good chance for us to have that dialogue and highlight where we feel together that we need clarification."

For more information on the IBIA convention and to register for the event, click here.