Recent reports from the UCL Energy Institute Shipping and Oceans Research Group highlighted the critical issues at stake during the upcoming IMO meetings, particularly in the lead-up to IMO MEPC 83 in April 2025.
The first report by UCL, Frequently Asked Questions (FAQs) of the proposed policy measures being considered, shows how the landscape has shifted from the previous session just four months ago.
From the analysis of the submissions, there are now two main camps, one that favours a Global Fuel Standard (GFS) in combination with a levy and another with only the GFS with a credit trading scheme but not including a universal price on carbon. The former now has strong support from countries, comprising of 70% of tonnage, a level of support which is important if a vote is called.
Furthermore, the IMO is expected to agree on policies, called mid-term measures, that will be key for achieving IMO’s Strategic objectives, including completing international shipping’s decarbonisation by around 2050, and contributing to a just and equitable transition for all states.
With 70% of tonnage now supporting a global fuel standard along with a carbon levy, it is crucial that the upcoming round of negotiations focuses on discussing the distribution of revenues, both within and outside the shipping sector.
…said Dr. Annika Frosch, Research Fellow, UCL Energy Institute.
One area of ongoing debate at the IMO is on whether revenues generated should be used solely for “in-sector” (shipping-related) activities or be more broadly distributed to address food security and other potential negative impacts on states.
The second report, by UCL in partnership with IDDRI, and CIRAD shows the mid-term measures will likely raise transport costs, disproportionately impacting Least Developed Countries (LDCs) and Small Island Developing States (SIDS). This increase in transport costs could affect food security of vulnerable countries in the short term, although the effects in the long term remain uncertain.
The analysis, which uses novel data and methods to understand food security implications, such as the vulnerability to food imports composite index, to assess each country’s vulnerability to food price increases, incorporating factors such as dependence on food imports, existing food insecurity and poverty levels, shows that countries such as Papua New Guinea, Haiti, Yemen, Solomon Islands, and Liberia face the greatest risks amongst other SIDS and LDCs.
In addition, many of these countries also have limited capacity to absorb in-sector revenue (e.g. investments in shipping infrastructure), suggesting that restricting carbon levy revenues to the shipping sector may not effectively address food security risks and therefore the IMO’s revenue distribution discussions should consider a broad range of options for distributing revenues to member states.
To remind, another study by UCL and UMAS recently showed that a high GHG price in combination with targeted e-fuel subsidies are the key policy components that can close the competitiveness gap between scalable zero emission fuels (e.g. e-fuels such as green ammonia) and other early compliance options such as LNG, biofuels and CCS.
