According to NGO Opportunity Green, the International Maritime Organisation (IMO) has all the powers necessary to regulate the emissions from the full lifecycle of any shipping fuels, including the ability to place that regulation within the International Convention for the Prevention of Pollution from Ships (MARPOL Convention).
The published paper investigates the potential legal avenues for IMO to regulate the full lifecycle of shipping fuel emissions. It finds that the IMO has broad powers to enact almost any required measure. Opportunity Green argues in the report that there are three principal reasons why the IMO can regulate upstream emissions:
The reasons are:
- Such regulation is consistent with IMO objectives and purposes;
- It is consistent with existing IMO practice on environmental regulation and fuels; and,
- It is within the IMO’s competency and there are no legal limits preventing regulation.
IMO discussions to date
The report notes that the IMO has been discussing how to regulate the lifecycle of fuels for some time, at the IMO’s Marine Environment Protection Committee (MEPC). At MEPC 79 (December 2022), there were three main suggestions on the table of how the emissions from future shipping fuels should be regulated:
- Well to Wake (WTW): including all lifecycle emissions from production to emission on the ship.
- Tank to Wake (TTW): including only the emissions emitted on the ship.
- TTW now and WTW later: combining both concepts.
One of the suggested reasons why the IMO should not regulate the full lifecycle of fuels by countries that hold that position is a concern over the IMO’s legal remit, argues Opportunity Green . The report identifies more concerns with regulating the full lifecycle of emissions that can also be seen as legal questions or adjacent to the legality of the IMO’s remit. These are:
- The potential for overlap with the UNFCCC remit, where countries report emissions on land in their Nationally Determined Contributions – dealt with in the section on double counting below
- If the IMO can find a certification process that can be relied upon to work around the world – dealt with in the section on the principle of No More Favourable Treatment.
The Marine Environment Protection Committee (MEPC)
According to Opportunity Green, the language on its face is broad enough to allow the MEPC to consider and act in any way the Committee deems appropriate, upon any matter falling within the scope of the IMO which would contribute to the prevention and control of marine pollution from ships, including regulation on the upstream stages of those fuels’ lifecycle.
MARPOL Regulates Countries (Not Ships)
The parties to MARPOL are countries, and the actual obligations imposed by MARPOL apply to countries and not ships, as Article 1 states, “the Parties to the Convention undertake to give effect to the provisions of the present Convention and those Annexes thereto.”, the report reminds.
Parties could agree to new provisions of MARPOL that did not primarily apply to ships (e.g., that all members of the Convention must ensure all hydrogen produced for shipping fuel must be produced using only renewable energy and not fossil fuels). Opportunity Green highlights that there is nothing in MARPOL which restricts the design of measures to only apply to emissions on board ships.
The parties to Annex VI already decided that greenhouse gases were close enough to traditional air pollutants that amending Annex VI to include greenhouse gases created no conflict, so there is no reason why they cannot decide that agreeing to regulate the greenhouse gases from thefull lifecycle of fuels does not also relate to the substance of MARPOL, the report claimed.
No More Favourable Treatment
The application of NMFT will mean that if an instrument is established that regulates the upstream emissions of fuels produced for shipping, the countries that decide to participate will be able to ensure there is no market distortion for any ships calling at their ports. This will also create pressure for other countries to sign up to the Convention13 as, in order to call at the ports of countries that have signed up, any ship would have to comply with the regulations on upstream emissions or be able to show that they had done so.
Depending on what the final measure agreed is, this could be done in a number of ways. A full discussion of the technical means for certifying fuels, including their upstream emissions, is beyond the scope of this paper but Lloyd’s Register have gone some way to answering this question in their Tracing the true carbon intensity of sustainable marine fuels report.
Avoiding double counting of emission reductions
If the IMO regulates the full lifecycle of emissions from shipping fuels which occur on land, a question of double counting could arise. Double counting is when the same emission reduction is counted more than once towards a mitigation commitment. Opportunity Green finds that this could be where the IMO imposes a mandatory reduction measure, and a country also claims the same emissions reductions in order to meet their Paris Agreement commitments through the UNFCCC.
However, the NGO presents the following ways to reduce the risk of double counting:
- Ensure that all emissions accounting is public, so that any reduction claims can be verified independently.
- The risk to be taken into account in the design of the measure. At the moment, there is no regulation against which a shipowner or country could claim an emission reduction.
- Ensure that the enforcement of the measure does not rely on flag States. Relying on flag States is problematic because they often have little nexus to either the journeys the ship undertakes, or where fuel is produced or purchased.
Conclusion reached in Opportunity Green’s report
Nowhere are any of the IMO’s powers limited specifically to emissions from the ship but rather allow the IMO to regulate the full lifecycle of shipping fuels, including the upstream emissions. Similarly, there is nothing in MARPOL which restricts that Convention to emissions from the ship only. As long as IMO members follow the correct procedures to agree a regulation on the full lifecycle of fuels, then there can be no concern of the IMO exceeding its jurisdiction. The only explicit limits upon amendments to MARPOL are that they should relate to the substance of that Protocol or Annex in MARPOL and must be consistent with the articles of MARPOL. There is no reason to suppose that an amendment to MARPOL that includes the emissions from the production of shipping fuels would not be consistent with the substance of MARPOL.
