How Is the Shipping Industry Tackling Emissions? – Chinmaya IAS Academy

Context:

The shipping industry contributes nearly 2.8% of global greenhouse gas (GHG) emissions, yet has historically remained outside binding climate obligations under the Kyoto Protocol and the Paris Agreement.
At its 83^rd session (MEPC 83), the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) adopted a Market-Based Measure (MBM) framework, marking the first concrete global step toward regulating maritime emissions.
The issue is relevant to GS Paper 3 (Environment & Economy) and GS Paper 2 (International Climate Governance).

Key Highlights:

Global Emission Reduction Targets (IMO Framework)

Alignment with Paris Agreement temperature goals.
Adoption of global shipping GHG reduction targets:
- 20% reduction by 2030 (on net-zero pathways)
- 70% reduction by 2040
- Net-zero emissions by 2050

Market-Based Measure (MBM) Framework

Introduces a global carbon pricing mechanism for shipping emissions.
Core components include:
- Carbon pricing / levy on ship emissions.
- Compliance incentives for cleaner fuels and technologies.
- Revenue recycling to support developing countries and climate-vulnerable states.
Expected to generate $40–60 billion annually, covering around 236 ships (about 0.1% of the global fleet, yet high emitters).

Why Shipping Emissions Lagged Earlier

Competing Proposals at MEPC 83

Carbon Levy: Proposed by Marshall Islands and Solomon Islands, aimed at funding loss and damage.
Fuel Standard + Reward Mechanism: Backed by the European Union, linking compliance with incentives.
Early Mover Rewards: Proposed by Singapore, encouraging first adopters of green fuels.

Global Political Response

Oil-exporting countries (e.g., Saudi Arabia) opposed strong fossil fuel disincentives.
Small Island Developing States (SIDS) and the EU pushed for early decarbonisation and compensation for climate impacts.
United States re-engaged actively after renewed climate cooperation under the Biden administration.

India’s Position and Strategy

Supported:
- Transition to zero or near-zero emission fuels.
- Development of green hydrogen under the National Green Hydrogen Mission.
- Equitable transition, with safeguards against trade and freight cost shocks for developing economies.
India aims to become a green hydrogen bunkering hub, leveraging port infrastructure and renewable energy capacity.

Impact on the Shipping Industry and India

Compliance costs may increase logistics costs in India by 8–9% by 2030.
Long-term benefits if India develops domestic green shipping fuel ecosystems.
Opportunity for leadership in green maritime technology and fuel supply chains.

Scientific / Technical Concepts Involved:

GHG Fuel Standard: Regulates the emission intensity of fuels used in shipping.
Carbon Pricing Mechanism: Assigns a cost to carbon emissions to incentivise cleaner alternatives.
Bunkering: Refuelling infrastructure for ships; green bunkering involves hydrogen, ammonia, or methanol.

Relevant Prelims Points:

Issue: Rising maritime emissions and lack of binding regulation.
Institution: International Maritime Organization (IMO) – UN specialised agency.
Key Initiative: Market-Based Measure (MBM) adopted at MEPC 83.
Targets: 2030, 2040, and 2050 decarbonisation milestones.
Challenges: High compliance costs, geopolitical resistance, fuel availability.
Impact: Cleaner global trade, but short-term freight cost pressures.

Relevant Mains Points:

Governance Aspect: First instance of global climate governance over shipping.
Economic Dimension: Balancing decarbonisation with trade competitiveness of developing nations.
Climate Diplomacy: India’s constructive role reflects responsible climate leadership.
Way Forward:
- Scaling up green fuel production (hydrogen, ammonia).
- Financial and technological support for developing countries.
- Gradual implementation to avoid trade shocks.
- Strengthening port-led green industrial clusters.