Governments have agreed to start considering mid and long-term measures on shipping emissions, including a proposed $100 greenhouse gas levy. The decision by the IMO’s MEPC paves the way for the next phase in the implementation of IMO’s initial decarbonization strategy, which aims to achieve a minimum 50% reduction in greenhouse gas emissions by 2050 compared with 2008. It will also mark the start of arguably the most challenging negotiations the MEPC has had to undertake since adopting the initial strategy in 2018, as political and economic considerations are expected to permeate the discussions.

After adopting a contested package of short-term measures this week, governments will begin discussing mid- and long-term measures at an intersessional meeting on emissions in October, ahead of the MEPC meeting the following month. The MEPC also agreed to further consider a proposal for a $100 levy on greenhouse gas emissions from ships in October meeting, after MEPC chair Hideaki Saito had indicated the specific proposal would not be considered again until November. The decision to take up the proposal in the intersessional rather than the MEPC gives it an opportunity for faster development and more thorough scrutiny. The intersessional is dedicated to greenhouse gas issues and delegates have more time to examine and negotiate documents.

Several governments had shown strong opposition to the potential market-based measures, including the $100 levy, during discussion on June 16. However, when the topic came up again the following day no country objected to re-considering this proposal in October’s intersessional. Overnight negotiations in an informal group saw developing states such as Argentina, Brazil and others agree to approve the work plan in exchange for the inclusion of impact assessment of the measures on states in the process and the potential to adjust the measures after they are adopted.

The work plan consists of three phases. The first is meant to have finished by spring 2022 and is the collection and analysis of the different potential measures. The second phase will see governments select one measure or more to develop further as a priority by spring 2023. “This decision should be based on an assessment of the proposed measures, in particular their feasibility, their effectiveness to deliver the long-term levels of ambition of the initial strategy and their potential impacts on states,” the work plan states. IMO delegates will also be working at the same time on the revision of the strategy and levels of ambition, which is scheduled for 2023. In the third phase, the MEPC will finalize these selected measures within a specific time frame that is not defined.

IMO secretary general Kitack Lim welcomed the approval of the work plan and said it sends a signal of the MEPC’s intentions to work on new measures. “Our consideration of mid and long-term measures will demand even more of us,” he said in closing remarks. Market-based measures, which could take the form of a carbon levy or some other market mechanism, are just one of the potential mid-term measures, according to the IMO strategy.

Other mid-term measures include operational efficiency requirements, more technical co-operation and capacity-building between states and national action plans. The MEPC also agreed to have another intersessional meeting in September dedicated to measures to tackle methane slip and develop guidelines on the intensity of lifecycle greenhouse gas intensity of fuels.