21 June 2024 (Lloyd's List) - THE International Maritime Organization will be on top of shipping’s regulatory agenda during the second half of 2024, as its member states will try to inch closer to an agreement over a greenhouse gas pricing mechanism and a fuel standard.

The IMO’s Marine Environment Protection Committee meeting at the end of September could make or break key negotiations taking place at the UN agency over emissions-reduction measures to put the shipping industry on the right path to hit net zero targets in 2050.

IMO member states will try to reach consensus on the so-called mid-term measures at MEPC82 between September 30 and October 4, as this will be the last MEPC meeting before states need to approve measures at MEPC83 in spring 2025.

The IMO agreed to adopt mid-term measures at an extraordinary MEPC meeting in autumn 2025.

In previous discussions on the type of the greenhouse gas pricing mechanism, two camps emerged among member states, with China, Brazil and South Africa, among others, firmly coming out against a green levy that is backed by some Pacific Islands and European states.

Some poorer countries have been vocally against a global IMO levy, arguing that a tax on shipping would hurt their economies more than rich states.

A group of countries, including China, Brazil and Norway, proposed a technical measure along with a flexibility mechanism, arguing that a separate economic measure was not needed.

Certain states held talks on the sidelines of this June’s UN Climate Meetings in Germany to find convergence on the economic measure, although it was not clear whether they were able to move the two camps closer.

Delegates will carefully analyse the findings from the IMO’s Comprehensive Impact Assessment that aims to predict the potential impact of the proposed economic measures on the global shipping fleet and respective member state economies.

The impact assessment report will be submitted to the IMO before MEPC82. 

There is widespread agreement among most member states to adopt a global fuel standard as the technical mid-term measure.

The EU-backed fuel standard is the frontrunner between different proposals, raising expectations that the IMO will adopt a global version of the FuelEU Maritime legislation.

Shipping companies will be rushing to prepare their compliance strategies with FuelEU Maritime in the second half of this year, as they must submit official monitoring plans to their verifiers by September.

Biofuel-blended bunkering and pooling will be the primary compliance methods, while a significant number of vessels will likely opt to pay the penalty if other methods prove more expensive.

In the US, the 2024 election result may have serious repercussions for the nation’s plans to become a hub for green hydrogen and e-fuel producers, as key elements of the Inflation Reduction Act could risk being overturned if Donald Trump wins the election.

The spending package, in its current form, offers the most generous subsidies for green hydrogen and e-fuels such as green ammonia and methanol. 

This article is part of Lloyd’s List’s Half-year Outlook, which will be published in full later this month