MEPC 82: Clear regulations needed to support investments and drive emission reduction
Image: Engebret Dahm, CEO Klaveness Combination Carriers
The 82nd session of IMO’s Marine Environment Protection Committee (MEPC) met in London 30 September to 4 October, 2024 and discussed “mid-term measures” to bring about GHG reductions in line with IMO ambition (compared to 2008 baseline): 20-30% by 2030, 70-80% by 2040 and net-zero 2050.
We understand that there continues to be large disagreement on the fundamental shape of these measures. Many countries are supporting a levy/flat fee on emissions, possibly in combination with a fuel standard that sets requirements to introduce new low carbon fuels into the shipping fuel mix. But several countries seem to reject a levy, and concentrate only on the fuel standard.
Time is short with the deadline to reach a consensus by the end of 2025, making the next six months up to the MEPC meeting in April 2025 especially critical. With these deadlines fast approaching, we are disappointed in the lack of progress made in MEPC82. Significant work is clearly needed to reach agreement on the regulations which will bring shipping to net zero in 2050.
Delaying action is not an option and will only lead to future pain both for shipowners and their customers — an unclear pathway ahead will continue to delay necessary investments in fleet efficiency improvements, alternative fuel capabilities on newbuildings, and especially building production and distribution capacity of new fuels.
The largest risks are currently that we end with another flawed and inefficient regulation from the IMO, that gives the industry limited incentives to decarbonize and insufficient predictability for the large investments needed. We are especially concerned about the possibility of regulations which push the industry towards specific fuels or solutions which may be far from ideal for certain segments, either making it challenging to comply, or amplifying the impact on shipping customers.
Cargo owners can mitigate these regulatory risks by choosing carbon-efficient freight, resilient to any kind of future carbon regulations. Some of our customers are highly committed to this journey and already work with us to invest in emissions reductions on our vessels trading today, through the 2030s, and into the 2040s.
But we need predictable and technology-agnostic regulations, giving everyone the ability to cut their emissions in the most effective way. IMO should follow the EU’s example, combining a carbon levy with a fuel standard that has a predictable step-up plan!
Timing is critical now for the IMO to reach agreement by April and give the industry a clear pathway to decarbonize.
About Klaveness Combination Carriers ASA
KCC is the world leader in combination carriers, owning and operating eight CABU and eight CLEANBU combination carriers with three CABU vessels under construction for delivery in 2026. KCC’s combination carriers are built for transportation of both wet and dry bulk cargoes, being operated in trades where the vessels efficiently combine dry and wet cargoes with minimum ballast. Through their high utilization and efficiency, the vessels emit up to 40% less CO2 per transported ton compared to standard tanker and dry bulk vessels in current and targeted combination trading patterns.
For further queries, please contact:
Engebret Dahm, CEO
Telephone: +47 957 46 851
Liv Dyrnes, CFO & Deputy CFO
Telephone: +47 976 60 561