Context: Recently, at its 83rd session, the Marine Environment Protection Committee (MERC) of the International Maritime Organisation (IMO) has approved a draft legal text for a Market-Based Measure (MBM) framework aimed at decarbonising the international shipping industry and promoting green shipping.
Relevance of the topic:
Prelims: MEPC-83, MARPOL Convention, Green fuels, CBDR-RC principle.
Mains: Need for green shipping, steps taken and implementation challenges.
Why does Green Shipping Matter?
Shipping plays an outsized role in global emissions:
- The sector emits approximately one billion metric tonnes of GHG each year, representing about 2.8% of total global emissions.
- If ranked as a country, international shipping would be the sixth-largest emitter in the world, between Germany and Japan. Without intervention, shipping emissions could increase by 50–250% by 2050 due to growing global trade.
Given its international nature, shipping is uniquely positioned for global regulation, making the IMO's action a significant precedent.
International Maritime Organisation:
- IMO is the United Nations specialised agency responsible for regulating maritime transport, ensuring the safety and security of shipping, and preventing marine pollution.
- Its main role is to create a regulatory framework for the shipping industry that is fair and effective, universally adopted and universally implemented.
- IMO measures cover all aspects of international shipping- including ship design, construction, equipment, manning, operation and disposal.
- Established in1948 (under the UN Convention), came into force in 1958.
- Headquarters: London, United Kingdom
- Members: 175 Member States including India.
For over ten years, IMO has been working to decarbonise the maritime industry. It undertook various strategies such as:
- Initial GHG Strategy (2018) and its Updated GHG Strategy (2023).
- Technical and operational measures under Annex VI of the MARPOL Convention, including: Energy Efficiency Design Index (EEDI), Ship Energy Efficiency Management Plan (SEEMP), Mandatory fuel oil consumption reporting.
However, without a binding economic mechanism, these efforts had limited impact. This led to a shift in focus toward Market-Based Measures (MBMs) to internalise the environmental cost of emissions.
Key Highlights of MEPC-83
At the 83rd session, IMO adopted Singapore’s Hybrid Model as the IMO Net Zero Framework- making shipping the first global industry with a binding emissions levy. It aims to help the shipping industry reduce its greenhouse gas emissions to net zero by or around 2050.
Features of Singapore’s Hybrid Model (IMO Net Zero Framework):
- GHG Fuel Standard: Sets a greenhouse gas (GHG) intensity benchmark for marine fuels. Encourages the use of Zero or Near-Zero emission fuels- such as green hydrogen, ammonia, or methanol. Ships are required to meet a specified carbon intensity target per megajoule (MJ) of fuel.
- Tiered Credit and Penalty System: Ships exceeding performance targets (i.e., using cleaner fuels than the standard) receive surplus emission credits. Ships underperforming (i.e., emitting more than the threshold) must purchase remedial credits or units to offset their excess emissions.
- Progressive Benchmarks: The GHG intensity thresholds become stricter over time, driving innovation and investment in greener technologies. E.g., IMO rewards fuels under 19.0 g CO₂e/MJ until 2034, and under 14.0 g CO₂e/MJ thereafter.
- Global but Differentiated Incentives: While the framework is universally applicable, it is designed to provide economic flexibility for developing countries.
Challenges to the IMO Net Zero Framework
1. Legal and Procedural Hurdles:
The draft Net Zero Framework was approved with 63 votes in favour, 16 against, and 24 abstentions. To implement the Net Zero Framework, IMO needs to amend Annex VI of the MARPOL convention, which governs air pollution from ships.
- The amendment will undergo a six-month circulation period among all contracting parties to MARPOL. For final adoption, it requires a two-thirds majority of votes from members present and voting.
- Even if the amendment is adopted, it can still be blocked if one-third of the parties, representing at least 50% of the global shipping tonnage, submit formal written objections.
2. Geopolitical Resistance:
- The US boycotted the IMO deliberations and warned of reciprocal measures, if a global levy (especially one aligned with the EU proposal) was adopted.
- Major fossil fuel exporters (like Saudi Arabia) and large shipping nations (like China) are resistant to aggressive emission controls.
- Shipowners, especially from traditional maritime powers like Greece, are sceptical about the economic feasibility and compliance costs.
- Small Island Developing States (SIDS) and Least Developed Countries (LDCs) demanded high levies to fund climate adaptation.
- Norway and Scandinavian nations pushed for reward mechanisms to acknowledge early investments in green tech.
- Brazil advocated for methanol as a transitional marine fuel.
3. Erosion of the CBDR-RC principle:
- CBDR-RC is a core principle enshrined in climate agreements like UNFCCC, Kyoto Protocol and the Paris Agreement which acknowledges that all nations must address climate change but recognise historical responsibility and unequal capacities. Developed nations, with their longer industrial histories, are expected to bear greater burdens.
- However, recent IMO proceedings reflect an effort by wealthier nations to shift responsibility onto developing economies, despite stark differences in income and consumption.
Impacts on India
While some short-term cost burdens are expected, India stands to benefit significantly in the long run:
- Minimal Near-Term Impact: India’s logistics costs are projected to increase by 4.98-7.29% (imports) and 5.92-8.09% (exports) by 2030.
- Limited Exposure: India currently operates nearly 236 ships over 5,000 gross tonnage, with only 135 involved in international voyages. Since MBMs apply only to international shipping, India’s coastal fleet remains unaffected.
- Green Hydrogen Export Potential: Under the National Hydrogen Mission, India is developing a competitive green hydrogen sector. Indian green hydrogen, with a GHG intensity of about 16.7 gCO₂e/MJ, is well below the IMO’s threshold of 19.0 gCO₂e/MJ (till 2034) and 14.0 gCO₂e/MJ (thereafter), making it a viable export for green fuel bunkering globally.
- Port Infrastructure: At least three Indian ports are gearing up to offer green hydrogen bunkering, positioning India as a future clean fuel hub.
Despite persistent disagreements, the adoption of a MBM by the IMO represents a milestone in the journey toward decarbonisation. If successful, this framework could make shipping the first truly global sector to operate under binding climate goals, setting a powerful precedent for others to follow.










