E

INTERSESSIONAL MEETING OF THE ISWG-GHG 2/2/9

WORKING GROUP ON REDUCTION OF 22 September 2017
GHG EMISSIONS FROM SHIPS ENGLISH ONLY
2nd session
Agenda item 2

FURTHER DEVELOPMENT OF THE STRUCTURE AND IDENTIFICATION OF CORE

ELEMENTS OF THE DRAFT INITIAL IMO STRATEGY ON REDUCTION OF GHG
EMISSIONS FROM SHIPS

Further development of the IMO Strategy on reduction of GHG emissions from ships

Submitted by Panama and Saudi Arabia

SUMMARY

Executive summary: This document proposes a way to progress the Strategy further
taking into account the objectives of the Organization, the measures
implemented, the measures under development and the concerns of
Member States and industry

Strategic direction: 7.3

High-level action: 7.3.2

Output: 7.3.2.1

Action to be taken: Paragraph 28

Related documents: MEPC 57/21; MEPC 70/18; MEPC 71/17, MEPC 71/7,
MEPC 71/7/6; ISWG-GHG 1/2/4, ISWG-GHG 1/2/7; and
MEPC.229(65)

BACKGROUND

1 MEPC 70 requested the Intersessional Working Group on Reduction of GHG

emissions from ships (ISWG-GHG 1) to examine, among other things, how to progress the
issue of GHG emissions, and to advise the Committee accordingly, with a view to implement
the Roadmap for developing a comprehensive IMO Strategy on the reduction of GHG
emissions from ships.

2 The ISWG-GHG prepared a report containing the views of the Member States,
agencies, and observers that took part in the discussions, and in particular the perspectives,
concerns, and aspirations of the participating States, without reaching any specific
conclusions. However, this exercise was useful in progressing the understanding of the
possible ideological barriers.

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3 MEPC 71 noted the following draft structure for the initial IMO Strategy on reduction
of GHG emissions from ships:

.1 Preamble/introduction/context including emission scenarios;

.2 Vision;

.3 Levels of ambition;
Guiding principles;

.4 List of candidate short-, mid- and long-term further measures with possible
timelines and their possible impacts on States;

.5 Barriers and supportive measures; capacity building and technical

cooperation; R&D;

.6 Follow-up actions towards the development of the revised Strategy; and

.7 Periodic review of the Strategy.

4 MEPC 71 agreed the following terms of reference for the next sessions of the
ISWG-GHG:

.1 further develop the structure and identify core elements of the draft initial IMO
Strategy on reduction of GHG emissions from ships;

.2 develop draft text for inclusion in the initial Strategy;

.3 further consider how to progress the matter of reduction of GHG emissions

from ships and advise the Committee as appropriate; and

.4 submit a report to MEPC 72.

STRUCTURE OF THE STRATEGY

Vision

5 The vision of the IMO Strategy on the reduction of GHG emissions from ships, as a
concept, should be understood as the future projection of IMO's position within the specific
subject that, serves to guide, model and encourage the Organization as a whole to achieve its
objective.

6 This vision which is a future aspiration, must definitely be affordable or possible over
time, for all Member States; it must be inclusive and positive, as well as broad enough to allow
the application of various mechanisms to achieve it.

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7 To define the vision the obvious question would be: "what are IMO's goals in terms of
reducing GHG emissions from ships?" in this context the co-sponsors propose that the vision
should be:

IMO's vision is to reduce in the short term greenhouse gas emissions from
ships to the lowest level possible by strengthening the implementation of the
measures under development, and thereby contribute to reducing the
vulnerability of climate change, serving the needs of the world through maritime
transport with the usual effectiveness.

Also, to achieve in the long term total reduction of greenhouse gas emissions
of the maritime sector with the development of efficient technology and thus
contribute to the construction of a clean and resilient future.

8 The Organization has been implementing technical and operational activities to

address the emissions of greenhouse gases from ships, in addition to other emissions
including SOX and PM, NOX, and Black Carbon, as noted in document ISWG-GHG 1/2 from
the Secretariat. This justifies further that the short-term vision proposed is not a utopia for the
Organization to achieve. By strengthening ongoing activities and by continuing the
development of new measures, the Organization can reach its peak and commit to the
continued reduction of GHG emissions from ships.

9 On the other hand, total reduction of greenhouse gas emissions is necessarily that
long-term portion of the vision that can be achieved in a longer period with the development of
mechanisms and technologies, which are not available, or not available in sufficient quantities
to supply the sector as a whole to date. Nonetheless, total reduction of greenhouse gas
emissions remains as a clear long-term goal for the Organization.

Levels of ambition/Guiding principles.

Levels of ambition

10 When we refer to the "most serious problem facing humanity" as described by Laurent
Fabius, President of COP 21, and the cause of the preamble of territorial disappearance
suffered by countries such as Tuvalu, Kiribati, Solomon Islands, the Marshall Islands, among
others, we should almost instinctively consider the highest level of ambition possible.

11 However, when we take into account the reality of technological capabilities of the
sector as tools to realize the ideal objectives, in contrast to the highest level of ambition, we
are forced to reconsider the level of ambition, and replace it with a more realistic one in terms
of time and space. That realistic level needs to be clear, serious, and with sufficient strength
to demonstrate the commitment of the International Maritime Organization representing all the
actors involved within the sector.

12 Given the two extremes we are obliged to answer: what would be the appropriate
level for IMO within the strategy for the reduction of greenhouse gases?

13 Answering the question is not easy, not because the choice is to choose one end or
another, but because this requires us to answer the following questions, to which we have no
definitive answers at hand:

.1 how much reduction of GHG emissions from ships, in particular, needs to be

achieved in a short time to maintain the temperature increase in this century,
below 2C?;

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.2 how much effort would be necessary to limit the temperature rise even more,
below 1.5C above pre-industrial levels?; and

.3 if GHG emissions from ships were zero, how many degrees below would the
global temperature be, taking into account the percentage of emissions of
ships in the global emissions count?

14 Without any of these data we could not aspire to the highest level of ambition because
somehow we could be, without justification, putting at risk the first and last purpose of the
maritime sector, which is to be the backbone of international trade for the bulk transportation
of raw materials, and for the import and export of food and manufactured goods with the
effectiveness and cost accustomed.

15 That is why the co-sponsors consider that, following the orientation given by the
vision, the level of ambition must be decisive and progressive in its increase, without defining
points or degrees, but committing itself with a forceful peak and with the gradual decrease to
zero (0) emissions of greenhouse gases from ships, which will be progressively adjusted
through a periodic review of five (5) years as suggested by Japan in document
ISWG-GHG 1/2/4. This assessment system will allow reviewing the performance of measures
implemented and oriented to consequent total reduction of greenhouse gas emissions.

16 This will allow the Organization to maintain the highest level of contribution to global
society by means of the maritime industry and at the same time commit their greatest efforts
towards the absolute reduction of emissions of greenhouse gases from ships without
sacrificing the purposes of the sector, while ensuring IMO's role as the right forum for this
issue.

Guiding principles

17 Understanding the principles as normative guidelines that should regulate the

applicability or application of measures to achieve the vision, in particular the reduction of
greenhouse gases from ships, must be coherent with two particular aspects: 1) with the nature
of the object (reduction of GHG emissions from ships), and 2) with the nature of the subject
(IMO, which is the entity that will instruct the implementation of the measures).

18 According to the subject, the principle of "no more favourable treatment" is the agreed
and established principle of the IMO as a functional normative framework for the purposes,
application, and orderly development of the sector. As it has already been mentioned, no other
principle should be superimposed on the Organization.

19 According to the object of study, the principle envisaged for the whole theme related
to climate action is "common but differentiated responsibilities and respective capabilities"
(CBDR & RC), which takes into account the different contribution rates in the environment, the
differentiated responsibilities for the different capacities.

20 It is for these reasons that the co-sponsors are of the opinion that preferentially
applying one principle and excluding the other will constitute an arbitrary and practical
complication for the execution of the measures envisaged for the fulfilment of the collective
vision, thus such we consider vital the coupling of both principles in the treatment of the subject
by this Organization.

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21 Consequently we can conclude this section referring the importance of being able to
converge both principles:

.1 The nature of the subject. The ecological theme of climate change, in any
of its forms, is regulated by the principle of common but differentiated
responsibilities and respective capacities, so pretending to address the issue
away from this guiding principle would be arbitrary, therefore
counterproductive; and

.2 Achieving vision fulfilment. In order to achieve the vision, it is necessary

to apply all the functional measures within the reach of IMO, Members
States, and the sector as a whole. If only one of the principles were applied,
the measures oriented or regulated by the not-chosen principle would be
automatically excluded.

22 However, recalling that Parties to MARPOL Annex VI are expected to give full and
complete effect of MARPOL Annex VI, the use of these two principles working together for the
development of the Strategy would not be other than to serve as filters to establish, evaluate,
rationalize or model the measures applied or applicable for the purpose of achieving the vision
of the Strategy. While it is true that the intention of conciliating both principles is for the effective
reduction of GHG from ships, neither principle should be used to go against the structure and
stability of the maritime sector.

Guiding criteria of the Strategy

23 The Strategy, understood as a series of planned actions aimed at reducing

greenhouse gases from ships, should be guided by more specific criteria which link, in addition,
the maritime sector, the means envisaged, and the capacities of the actors.

24 These guiding criteria should be able to meet the stated vision and the future policies
of the organization related to GHGs.

25 In order to develop this list of criteria, we have constructively taken advantage of the
valuable contributions of the countries in the previous discussion and defined the following as
the most appropriate guiding criteria for the Strategy.

.1 Confidence. (MEPC 71/7, China and India) The IMO Strategy "should
provide confidence. It must give the world confidence that the low-emissions
transformation of the shipping sector is inevitable and already under way.
Equally important, it must provide confidence to each and every IMO Member
State by guaranteeing its national circumstances are sufficiently considered
and the low-emission vision is achievable.";

.2 Durable. (MEPC 71/7, China and India). The IMO Strategy "should be
durable. It must be able to accommodate changes in the global economy and
fluctuation in the international trade, and not have to be continually
renegotiated. Instead of establishing a regime of definite duration, it should
have the ability to be updated continuously and increase the ambition
overtime.";

.3 Balanced and capable of recognizing specific characteristics of

maritime transport. (MEPC 71/7, China and India; MEPC 71/7/6
Saudi Arabia, Brazil and others). The IMO Strategy "must embody solidarity
and consensus, therefore strike a balance between the rich and poor,

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ensuring support for developing countries, which are crucial to the success
of the strategy." The Strategy should also take into account the intrinsic
characteristics of the shipping sector including the trade imbalances in terms
of the cost of transportation, caused inter alia by geographic disparity,
voyages in ballast, etc.;

.4 Coherent and effective with the multilateral climate change regime.

(MEPC 71/7/6 Saudi Arabia, Brazil and others; ISWG-GHG 1/2/4 Japan;
MEPC 57/21, paragraph 4.73). The Strategy must achieve the integration of
the maritime sector and all its actors in the global effort against climate
change and at the same time must be effective to achieve the relief of the
planet, based on a responsible and realistic approach, recognizing the
different capacities and possibilities of the sector, the market, and the
countries;

.5 Flexible in accommodating sectorial development. (ISWG GHG 1/2/7;

ISWG-GHG 1/2/4, Japan; MEPC 57/21, paragraph 4.73). The Strategy must
allow the necessary flexibility for its continuous adaptation based on the new
data or updated information on GHG from ships, operational solutions,
available technology, etc.; and

.6 Supportive of innovation, research and development, providing the

right incentives. (ISWG GHG 1/2/7, Singapore; MEPC 71/7/6,
Saudi Arabia, Brazil et al.; ISWG-GHG 1/2/4, Japan; MEPC 57/21,
paragraph 4.73). The Strategy should promote investment in research,
development and deployment of emission reduction technologies, alternative
fuel, carbon treatment, and conversion technology, among others, within a
framework which provides adequate incentives for these efforts.

Guiding criteria of the measures

26 When it is time to consider concrete measures to implement the Strategy for the
fulfilment of the vision of the Organization, extreme care should be sought to achieve
progressive growth within the sector, taking into account the characteristics of shipping
transport, vulnerability of States, and world trade. It is for this reason that we consider that the
measures, in particular, should be framed within basic criteria for their more balanced selection
and execution.

27 Similarly, as the guiding principles of the Strategy, the co-sponsors proposes the
following list of guiding criteria for measures, emanating from previous discussions and inputs
from States:

.1 Evidence-based. (ISWG GHG 1/2/7 Singapore; MEPC 71/7/6, Saudi

Arabia, Brazil et al.). Measures, whatever they may be, should be based on
a reliable analysis of truthful information, so as to eliminate the uncertainties,
especially, on GHG emissions, coupled with a system of monitoring,
verification and reporting of emissions from ships;

.2 Financing of technical cooperation, transfer of technology and impact

assessment. (MEPC 71/7/6, Saudi Arabia, Brazil et al.). All measures need
to be evaluated and confronted with possible implications for States,
including transport costs, cost of new measures, distance from countries,
etc.;

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.3 Cost-effective as much as possible. (ISWG GHG 1/2/7 Singapore;

ISWG-GHG 1/2/4, Japan; MEPC 57/21, paragraph 4.73). Measures should
be designed, as far as possible, to be cost-effective and not result in market
disruptions;

.4 Equally applicable to all states when referred to application by flag to

avoid competitive distortions. (ISWG-GHG 1/2/4, Japan; MEPC 57/21,
paragraph 4.73). In the case of specific measures applicable to vessels, for
this purpose, it must be applied fairly so as to avoid competitive distortions;
and

.5 Inclusive in addressing member States' concerns. (ISWG GHG 1/2/7,

Singapore) Measures should be taken taking into account the needs and
capacities of States, especially those whose vulnerability is most evident.

Action requested of the Working Group

28 The Working Group is invited to consider the proposals presented in this document
and to take action as appropriate.

___________

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