This month, International Maritime Organization (IMO) made substantial progress in developing proposed measures to reduce greenhouse gas emissions from international shipping.  The organization estimates that international shipping contributes approximately 2.7 percent of global CO2 emissions.  In the absence of future regulations, such emissions are predicted to increase by as much as a factor of three by 2050.  To address this issue, the IMO’s Marine Environmental Protection Committee (MEPC) met this month to discuss the development of new technical and operational measures to reduce emissions, including the development of design and operational measures to increase energy efficiency for new ships; an efficiency management plan suitable for all ships and a voluntary code of best practice to increase energy efficiency of ship operations. MEPC also approved draft interim guidelines for calculating the energy efficiency of new ships.

Notably, similar to the approach taken in other sectors, MEPC is also considering market-based measures to reduce greenhouse gas emissions, such as a global levy on fuel used by international shipping and the possible introduction of emission trading schemes for ships.  With respect to the adoption of a trading scheme, many unresolved issues remain including how allowances would be distributed, how the cap would be set and by whom, the banking of allowances, the legality and management of any system and the impact on world trade.  All of the above issues will be discussed further by MEPC’s working group on greenhouse gas emissions at an intersessional meeting in early 2009.  The working group’s findings will be presented at the next gathering of MEPC in July 2009, when final adoption of a comprehensive IMO regime to control greenhouse gas emissions from ships is planned.

For further information about this topic, please contact Akin Gump.