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What to expect from IMO’s MEPC80

All eyes will be on IMO’s pivotal Marine Environment Protection Committee on July 3-7, as the UN agency will revise its GHG strategy that will be key for thousands of shipping-related investment decisions

The global shipping regulator has been facing calls to set more ambitious GHG emissions reduction targets in recent years and it will finally make a decision at this key meeting that will reverberate across different industries. The UN agency also risks serious fragmentation of shipping regulations on a regional basis if it fails to deliver

THE International Maritime Organization will revise its greenhouse gas strategy at its Marine Environment Protection Committee on July 3-7, potentially marking the most important decision for global shipping for decades to come.

The United Nations agency will also decide on its future as the global shipping regulator — any failure to revise its levels of ambition in line with targets to keep global warming at 1.5°C could result in a serious fragmentation of shipping regulations around the world and it may even risk the IMO to virtually lose its mandate.

The IMO is currently in the final phase of its work plan to develop its mid and long-term strategy that it agreed at MEPC76 in June 2021.


The shipping industry is more or less in agreement that the IMO needs to set a net-zero target for 2050. Progressive members of the industry believe it must do so to align with 1.5°C goals, as they suggest the IMO’s current targets of 50% reduction by 2050 are not in line with the Paris Agreement.

There is growing optimism around the possibility to set a net-zero goal for 2050 at MEPC80, although industry sources said the final text could include vague language that only refers to a mid-century target rather than directly mentioning 2050.

Potential targets for 2030 and 2040 could prove to be more important than the 2050 one, as the industry needs to peak emissions as soon as possible, underlining the importance for the IMO to set targets for 2030 and 2040.

The UN agency could find some consensus between member states by using creative language that would refer to “intermediate checkpoints” rather than firm targets for 2030 and 2040, industry sources said.

The US, the UK and Canada seek a 37% emissions reduction by 2030 from a base level of 2008, while the EU countries proposed 29% by the same date. Two of the less progressive proposals from Japan and South Korea, suggest no such targets for 2030, while the Japanese one seeks just 50% by 2040.

Environmental groups have recently called for a 50% reduction by 2030, citing a study that suggests this target is viable with higher uptake of zero-emission fuels, speed reduction, as well as wind propulsion measures with the highest efficiency.

The shipping industry will not be able to decarbonise by just setting a regulatory framework based on a net-zero 2050 target, as most experts suggest it needs several other measures to complement the headline target.

Negotiations around market-based measures such as a carbon levy and other instruments that reward first movers and support least developed countries will be crucial at MEPC, as the industry expects a key signal from the IMO to start investing in zero-emission fuels and vessels.

There seems to be growing support for a levy from member states, as it is seen as the simplest solution to support first movers and bridge the price gap between alternative and conventional marine fuels.

But some sources said even though most of the member states supported a levy, there was some momentum behind the Chinese submission from countries that are openly against the levy. The Chinese plan proposes to penalise vessels that emit more GHGs than a pre-determined threshold and use the funds to reward ships that emit less than that level. Critics of the Chinese proposal suggest it doesn’t offer meaningful support for least developed countries and small island developing states.

Details of such market-based measures are unlikely to be decided at MEPC80, as member states may require more research on potential impacts of such measures on the industry, as well as each country. But a clear signal that the IMO will adopt a levy or another measure, such as a fund and reward, will go a long way to persuade companies to start investing in measures that will help the industry reach decarbonisation goals.

The final text coming out of MEPC80 could refer to a market-based mechanism without providing any details, sources said.

Delegates will also discuss a global fuel standard as a technical measure. EU countries and the European Commission submitted a proposal for a global fuel standard that aims to reduce the GHG intensity of bunker fuels, while also providing long-term certainty for fuel suppliers and shipowners.

Co-sponsors also suggested complementing this proposal with a carbon levy, and EU countries led by France have been lobbying for a levy in recent weeks.

IMO risks significant fragmentation of shipping regulations if it fails to adopt at least a net-zero target by 2050, as policy makers in the EU and the US have already shown willingness­­­­ to ramp up shipping regulations in such a scenario.

The EU has agreed to include shipping in its Emissions Trading System from 2024, marking the first carbon pricing for the industry in the world. It will likely continue to adopt more measures to reduce shipping emissions if the IMO fails to deliver.

The bloc has already reached a provisional agreement to set a target for renewable marine fuels from 2034.

Policy makers in the US have recently tabled a couple of proposals to tackle shipping emissions with a carbon tax. These developments clearly point to potential new legislation that will significantly increase risks for shipping companies, as the industry clearly prefers global regulation rather than regional ones.

The IMO needs to revise its GHG strategy to an acceptable level if it wants to avoid such fragmentation and hold on to its mandate to regulate global shipping.

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