• Heavy Pollution Footprint
  • Shipping emits ~1 billion metric tonnes of GHG annually.
  • Accounts for 2.8% of global emissions.
  • If treated as a nation, it would be the 6th largest emitter.
• Regulatory Motivation
  • Driven by the UN’s Sustainable Development Goals and the Paris Agreement.
  • IMO launched emissions-reduction measures starting in 2011.
  • 2018: Initial GHG Strategy set the path.
  • 2023: Updated strategy aims for net-zero by 2050.

KEY DECISIONS AT IMO’S MEPC-83

• Objective
  • Establish a Market-Based Measure (MBM) to reduce emissions.
  • Balance environmental goals with fairness in cost distribution.
• Proposals Tabled
  • International Chamber of Shipping: Fixed CO₂ levy.
  • China: Compliance units + alternative fuel investment.
  • EU: GHG levy managed by IMO fund.
  • India: “Bridging mechanism” — penalize underperformers, reward Zero/Near-Zero (ZNZ) fuels.
  • Singapore: Hybrid of India’s model + GHG Fuel Standard (GFS), with rewards for surplus units.
• Outcome of the Vote
  • Singapore’s model (inspired by India) was adopted as the Net Zero Framework.
  • Vote count: 63 in favor, 16 against, 22 abstentions.
  • Marked the first global emissions levy framework in shipping.

IMPLEMENTATION CHALLENGES

• Legal and Procedural Hurdles
  • Annex VI of the MARPOL convention needs amendment.
  • Requires:
    • 6-month circulation.
    • Two-thirds majority among voting member states.
    • No block from one-third of member states accounting for 50%+ of global shipping tonnage.
• Current Uncertainty
  • Vote does not guarantee implementation.
  • Opposition and abstentions leave the future uncertain.

GEOPOLITICAL DYNAMICS

• U.S. Position
  • Under Trump-era policies, the U.S. opposed global climate commitments.
  • Skipped the MEPC-83 discussions.
  • Threatened “reciprocal measures” against EU’s carbon levy.
• Oil Exporters
  • Led by Saudi Arabia, resisted green transitions to protect fossil fuel markets.
• Small Island & Developing States
  • Advocated high carbon levies.
  • Called for redirection of revenue to green development.
• China & Large Maritime Nations
  • Supported minimal levies.
  • Emphasized investment in cleaner fuels over taxation.
• Scandinavia & Norway
  • Wanted reward mechanisms for early adopters of green shipping.
• Brazil
  • Pushed for methanol as the primary marine fuel.
• Greece & Other Traditional Shipping Nations
  • Expressed skepticism over green levies and questioned feasibility.

IMPORTANCE OF GREEN SHIPPING

• Environmental Significance
  • Without action, shipping emissions may rise by 50–250% by 2050.
  • Pressure to align with Paris targets.
• Regulatory Milestones
  • Energy Efficiency Design Index (technical).
  • Ship Energy Efficiency Management Plan (operational).
  • Fuel oil consumption reporting (monitoring).
• Emission Targets
  • 40% reduction in carbon intensity by 2030 (from 2008).
  • 70% by 2040.
  • Net-zero by 2050.

PRINCIPLES OF CLIMATE JUSTICE

• CBDR-RC Erosion
  • ‘Common but Differentiated Responsibilities and Respective Capabilities’ principle being diluted.
  • Developed nations pushing greater burden onto developing economies.
  • Goes against foundational climate agreements (UNFCCC, Kyoto, Paris).

INDIA’S STRATEGIC POSITION

• Short-Term Economic Impact
  • Modest rise in logistics costs by 2030:
    • 5–7% for imports.
    • 6–8% for exports.
  • By 2050: Estimated 33–35% cost increase.
  • Trade volume impact expected to be minimal.
• Current Maritime Profile
  • 236 ships over 5,000 GT.
  • Only 135 engaged in international shipping.
  • Domestic coastal fleet unaffected by MBM.
• Fuel Cost Impact
  • Current fuel spend: ~$400 million/year.
  • Projected MBM-induced increase: $108 million by 2030.
• Strategic Opportunity in Green Fuel
  • Heavy investments in green hydrogen via National Hydrogen Mission.
  • Private sector players: Reliance, Adani, JSW.
  • Ports developing hydrogen bunkering facilities.
• Global Alignment
  • India’s green hydrogen meets IMO’s emission thresholds:
    • ≤16.7 g CO₂e/MJ vs. IMO cap of 19 g CO₂e/MJ until 2034.
  • Positions India for green fuel exports.

BROADER IMPLICATIONS

• First Sectoral Climate Regulation
  • Shipping becomes the first global industry with a mandatory emissions levy.
  • Sets a precedent for other sectors (e.g., aviation).
• Uncertain but Historic Moment
  • If implemented, would reshape maritime logistics.
  • Symbolizes a shift toward enforceable global climate action.

MAINS QUESTIONS

1. Analyze the challenges and complexities involved in implementing a Market-Based Measure (MBM) to reduce emissions in the shipping industry. What are the different proposals and perspectives on this issue?
2. Discuss the importance of green shipping and the role of regulatory measures in promoting sustainable practices in the maritime industry. What are the emission targets set by the IMO, and how can they be achieved?.