IMO fuel standard tied to emissions checkpoints

As the spring 2025 deadline for turning IMO’s revised GHG strategy into regulation approaches, progress was made last week at meeting 16 of the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG GHG 16).

The main step forward at the meeting was an agreement that the GHG Fuel Standard –a regulation limiting the well-to-wake GHG emissions of marine energy sources– will be set at a level to hit the IMO’s indicative checkpoints for reduced GHG emissions in 2030 and 2040 as well as the 2050 zero emissions target. The checkpoints call for a minimum reduction of GHG emissions by 2030 of 20%, striving for 30%, and by 2040 a minimum reduction of at least 70%, striving for 80%, compared to 2008 levels.

A readout of discussions at the meeting published by UMAS characterised the debate on shipping’s path to agreeing regulatory changes at next year’s MEPC 83 in spring as in its early stages.

The task ahead for member states includes narrowing down the candidate options for the mid-term measures under the IMO GHG Strategy including the GHG Fuel Standard and an economic measure.

UMAS said there were three approaches with similar levels of support among member states:

– Firstly, a solution popular among middle income countries was a fuel standard which includes the flexibility of a credit trading mechanism or Emission Trading System (ETS), and no further GHG pricing mechanism such as a levy.

– Secondly, popular among Small Islands Developing States (SIDS) and Least Developed Countries (LDC) was a simplified fuel standard without flexibility in combination with a universal GHG price such as a levy.

– Finally, a a solution popular among develop economies was a fuel standard which includes the flexibility of a credit trading mechanism or ETS, coupled with a levy or other universal GHG pricing mechanism.

Differences remain over how the proceeds of revenue generating measures will be distributed, but these differences are to be expected at this stage of negotiations, said UMAS.