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This report investigates the international law and policy challenges to the determination of the international shipping industry’s contribution to climate change mitigation efforts through the International Maritime Organization (IMO), a specialized agency of the United Nations and the competent international organization with respect to shipping in international law. The report sets out the international legal framework that serves as the context for the IMO initial strategy, the challenge of regulating greenhouse gas (GHG) emissions from international shipping, and the process and issues in determining the industry’s “fair share” of mitigation efforts and potential legal pathways. The report concludes with general, policy and legal considerations that have a bearing on the current and possible future directions of the nascent IMO strategy.

General considerations include the observation that the complexity and uncertainty underscoring the development of the IMO strategy call for a long-term planning instrument that is integrated and systemic in scope, flexible in approach and adaptive in application. As other regimes and sectors progress in developing and delivering on mitigation efforts, care should be exercised in considering lessons and tools from other sectors for application to shipping, given its uniqueness and that other sector experiences emanate from different contexts and considerations. Given continuing significant differences on GHG issues in the IMO, it is vital for the long-term IMO strategy to be advanced and maintained on the basis of the culture of consensus that has helped shape the IMO as a successful regulatory body.

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This EDF/Sabin Center paper investigates the potential legal bases for the International Maritime Organization (IMO) to enact climate measures. It finds that the IMO has broad powers to enact almost any required measure, and quickly via a tacit amendment to the International Convention for the Prevention of Pollution from Ships (MARPOL).

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new study released by UMAS estimates that the EU has, to date, directly spent $250 million on Liquefied Natural Gas (LNG) projects in the marine sector, providing 50% partnership funding with the private sector to support a total of $500 million investment.

This half-billion of spending will have no significant climate benefits at best, and could potentially increase greenhouse gas emissions from shipping, a conclusion in line with leading research in the field, the study finds., making LNG incapable of achieving the reductions required under the recently adopted International Maritime Organisation (IMO) strategy on reducing GHG emissions from ships.

The study reveals a high-level failure in EU planning, in which short-term improvements to air pollution via replacing heavy fuel oil consumption with Liquefied Natural Gas (LNG) come at the expense of locking in fossil fuel infrastructure for decades to come. Even if public funding on LNG infrastructure ceased by 2025 or 2030, total public expenditures over this period would still amount to US$0.95-1.5 billion; which is at least a five-fold increase from what has already been spent on LNG bunkering infrastructure to date, under EU’s CEF (Connecting Europe Facility) and TEN-T (Trans-European Transport Network) projects.

When including upstream emissions and all sources of GHGs, depending on the fuel’s supply chain and use, a switch to LNG can even increase GHG emissions, relative to conventional fuels in a Business As Usual scenario.

Reducing total annual emissions from shipping in-line with the initial IMO strategy objective of at least 50% GHG reduction by 2050 on 2008 levels, and the Paris Agreement temperature goals, is only possible with a switch to increased use of non-fossil fuel sources (hydrogen, ammonia, battery electrification) from 2030 at the latest and with rapid growth thereafter, as explored in two of the decarbonisation scenarios “limited gas” and “transition”.

Providing sustainable biofuels can be sourced, these could be a growing part of the fuel mix, for example as part of blends, before 2030, which could help to increase the timescale for the introduction of synthetic fuels (e.g. hydrogen and ammonia). 

In the scenario where the growth and duration of LNG as a marine fuel continues, referred to as the ‘high gas’ scenario in the report, then reducing total annual emissions from shipping in-line with the initial IMO strategy objective of at least 50% GHG reduction by 2050 on 2008 levels could only be made possible through GHG reductions being made out-of-sector, a thorny solution, not least as it would leave funds flowing out of the shipping sector, funds that could have been well spent to create real GHG reductions in-sector. Relying more heavily on the use of linkages to other (non-shipping) carbon markets is also dependent on the linkages providing sufficient access to low cost out-of-sector emissions reductions, something which is currently highly uncertain. In addition, the letter and spirit of IMO’s at least 50% absolute reduction commitment by 2050 requires absolute in-sector reductions without market linkages.

Many proponents argue that LNG is a transitional fuel and a natural precursor to biogas (biomethane). However, deep questions remain over the availability of such bioenergy to meet all of shipping’s needs, and uncertainties that this bioenergy will be cheaply available as a gas and not as a liquid. So using the ‘LNG as a transition fuel’ argument seriously risks future pathways to decarbonization, creating a single path dependency and technology lock-in.

“There is an uncertain future demand for LNG as a marine fuel over the next 10 years. On the one hand, it is an option for complying with the 2020 sulphur cap, but as it cannot enable the GHG reductions that have been committed to in the IMO’s initial strategy for GHG reduction, and the Paris temperature goals more generally, it is clear its role in shipping's transition to a low carbon future can only be transient” Domagoj Baresic, Consultant, UMAS and PhD researcher, UCL Energy Institute.

The cash flow for the “Limited Gas” scenario (LNG demand and investment flow in quickly initially, but with the development of zero emissions fuels, the demand for LNG soon peaks and declines) is strongly negative with a Net Present Value of -$211 million (-$100 million if only CAPEX is considered, which is the stranded investment aspect of the cost), which can be considered a direct investment loss by 2050. This scenario shows the potential risk of investing heavily in LNG bunkering infrastructure under Directive 2014/94/EU guidelines, if LNG is not taken up as a marine fuel by the maritime industry. As a result of a higher take up of biofuels and hydrogen (both of which also fall under Directive 2014/94/EU), and a strong push to get closer to the EU 2050 shipping 40% emission abatement target and IMO 2050 targets, LNG never becomes heavily diffused into the shipping industry.

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Multiple fuel options are on the table to reach zero emissions but all have their associated issues which need to be explored now both to identify the best of these options, and ensure they mature and become available.

The report, authored by Lloyds Register and UMAS, was geared to the needs and requirements of SSI members, who are mainly involved in deep-sea trades with container ships, bulk carriers and tankers. Shipping faces huge challenges in finding affordable zero-emission fuels, against a background of a sustained downturn in many parts of the sector, and a global requirement to keep transport costs low. In this environment, biofuels currently present the most affordable option for shipping, though great challenges remain in relation to the future availability, scale of production and sustainability of biofuels.


The report also examines electric power and hydrogen fuel cells, and takes note of the upstream CO2 emissions, which will need to be very low as these fuels will be judged on a “well to wake” whole lifecycle perspective. With development of other sector’s low carbon technologies and energy production’s decarbonisation it is expected that very low upstream emissions associated with these fuels will be achievable.

Dr Tristan Smith, Reader at UCL Energy Institute: “The shipping industry requires rapid technological changes to enable zero-emission ships: moving from fossil fuels to a combination of electricity (batteries), renewable fuels derived from hydrogen, and potentially bioenergy”

Dr Carlo Raucci, Principal Consultant at UMAS: “This study highlights the drivers, benefits and challenges of the most promising technologies. The shipping industry has a unique opportunity to contribute to the large potential for improvements of such technologies and aim for a profitable zero-emission service.”

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