MEPC 82: Operational efficiencies to help keep 2030 targets within reach: IMO Secretary-General

IMO member states have their work cut out for them this week to keep the 2030 targets alive.

PHOTO: IMO Secretary-General Arsenio Dominguez at the opening of this week's Marine Environment Protection Committee (MEPC 82) meeting. IMO

The IMO’s 2030 greenhouse gas (GHG) reduction target can be met with energy efficiency fixes like LED lights and digital storm-avoidance, the International Maritime Organisation's (IMO) Secretary-General Arsenio Dominguez said yesterday.

“Yes!” Dominguez said emphatically when ENGINE asked whether there is enough time to reach the IMO’s 2030 targets for GHG reduction and zero-emission fuel uptake.

GHG cuts through efficiency gains

Dominguez insists that the IMO’s 2030 GHG reduction target is within reach and that increased operational efficiencies on ships will get them there.

“Even by changing the lights inside a vessel to LED, you can already increase efficiency by 5%... as well as digitalisation and how some companies are using digital information for better routing of the ship, avoiding storms etc., there are several ways operationally that we can get there,” he told ENGINE at the IMO’s headquarter in London.

“We are actually on track to meet the 2030 targets because of the measures that we already have in place,” Dominguez said.

For clarity, Dominguez refers to the IMO’s target to cut GHG emissions from international shipping by 20%, striving for 30%, by 2030 compared to 2008.

IMO member states adopted this as one of their targets in a revised GHG strategy last summer.

Time to make zero-emission fuels attractive?

The other 2030 target – to increase uptake of zero- and near-zero emission fuels to at least 5%, and striving for 10%, by 2030 – cannot be met directly through higher energy efficiency. This target will instead require ships to actually change the energy they use onboard away from fossil fuels – unless carbon and methane can be captured after combustion and credited by the IMO.

But time is short and several prominent shipping companies, organisations and fuel producers have cast doubt over whether these targets are actually achievable.

“I think the IMO needs to step up now. We need a level of playing field,” Ardmore Shipping’s Garry Noonan said at the Riviera Maritime Decarbonisation, Europe conference in Amsterdam last week.

He was talking about the high prices for renewable fuels relative to fossil fuels, saying they can be 4-6 times more expensive, if you can get them now.

“So, if the free market can't do this on its own, that's when governments need to step in to drive both sides, the supply and demand. We need to have price parity on new fuels versus the old fuels, Noonan said.

When ENGINE asked, the IMO’s Dominguez did not directly address how the target for 5% uptake of zero-or near-zero emission fuels by 2030 can be met.

The IMO’s recipe is expected to be a combination of a GHG pricing mechanism, like a carbon levy, and a technical measure like a GHG fuel standard that rates fuels based on their GHG intensities.

These two so-called mid-term measures are on the agenda at the IMO in London this week. The week’s goal is not to adopt or even agree on these measures, but to discuss and make progress towards reaching an agreement by spring, and adopt them by autumn next year.

The earliest they can be implemented and have some teeth is then 2027, which leaves only three years to cut GHG emissions by 20-30% and stimulate uptake of zero- and near-zero emission fuels to 5-10% of all energy used onboard ships.

Not enough to go around

“The 5% target set by the IMO is an ambition the industry is collectively working towards. But what is not yet clear is exactly how that ambition will be achieved,” TotalEnergies new fuels solutions developer Cyril Hugoo told the Riviera conference in Amsterdam last week.

The 2030 targets are “very unrealistic”, said DNV Maritime chief executive Knut Ørbeck-Nilssen at a Capital Link conference in London a year ago, reported by Lloyd’s List. He reasoned that shipping companies will struggle to source enough fuels to make the targets, and that energy efficiency will not get them there.

Both supply and demand have to be stimulated for fuels with zero-emission potential, like green ammonia and methanol, biomethane and sustainable biofuels, to name a few.

Calling for IMO clarity

Increased supply capacity could follow firm bunker demand commitments like offtake agreements, bunker tenders and term contracts. But several major alternative fuel producers have called for more regulatory clarity from the IMO as a demand signal. When shipowners have to switch fuels to comply with regulations and avoid costlier fines, alternative fuel producers get greater demand signals that can underpin their investments into scaling production.

“The IMO has set strong ambitions and recognizes the need for low-carbon fuels, which we welcome. However, there is still a significant amount of detail to come and this needs to come quickly to give the strategy overall – and especially the 2030 checkpoint – a chance of success,” OCI HyFuels’ marine business development director Barend van Schalkwyk said after the IMO adopted its revised strategy a year ago.

The IMO has run 20 different scenarios on various combinations of GHG pricing and GHG fuel standard measures, Dominguez says, and a couple of them have been referenced more than others.

These measures are believed to be key to closing the price gaps between renewable and fossil bunker fuels in ports around the world.

Dominguez stresses that we cannot rely on just alternative fuels to hit the 2030 GHG reduction target.

“Right now, the main focus is 2030, and 2030 is not achievable only with alternative fuels and that is something that needs to be highlighted. Alternative fuels will take us into the 2040s and 2050s, but the technical and operational measures that have been put in place can and will take us to the 2030 goals, together with the implementation of the mid-term measures from 2027,” he says.

By Erik Hoffmann

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