THE CONTEXT: The International Maritime Organization (IMO), a specialized United Nations agency that regulates safety and pollution from ships, convened its 83rd session of the Marine Environment Protection Committee (MEPC-83). For the first time in any global sector, member States endorsed a Net‑Zero Framework combining a mandatory marine‑fuel standard with a global greenhouse‑gas (GHG) pricing mechanism, carried by a 63‑16 vote despite sharp geopolitical rifts.
WHY SHIPPING MATTERS:
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- International shipping emits ≈ 1 billion tonnes CO₂‑equivalent annually (≈ 2.8 % of global emissions), enough to rank sixth‑largest if it were a country.
- Absent corrective action, sectoral emissions could rise 50 – 250 % by 2050, imperilling the Paris Agreement’s 1.5 °C threshold.
- Because 80 % of world trade moves by sea, a levy affects global inflation, supply chains and the Blue Economy security of Small Island Developing States.
EVOLUTION OF THE IMO’S CLIMATE STRATEGY:
The IMO began regulating emissions through technical and operational measures from 2011, including:
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- Energy Efficiency Design Index (EEDI): Promotes energy-efficient ship designs.
- Ship Energy Efficiency Management Plan (SEEMP): Mandates operational improvements.
- Data Collection System (DCS): Tracks fuel oil consumption.
Subsequently, the Initial GHG Strategy (2018) and the Updated GHG Strategy (2023) advanced “levels of ambition”:
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- Reduce carbon intensity by 40% by 2030, 70% by 2040.
- Achieve net-zero emissions by or around 2050.
These align with the 13th UN Sustainable Development Goal (Climate Action) and the objectives of the Paris Agreement.
COMPETING MARKET‑BASED MEASURE (MBM) PROPOSALS AT MEPC‑83
| Proponent | Core design | Equity / efficiency logic |
|---|---|---|
| International Chamber of Shipping | Flat levy per tonne of CO₂ | Administrative simplicity, funds R&D pool. |
| People’s Republic of China | Cap and trade with tradable compliance units | Protects competitiveness of developing country fleets. |
| European Union | Uniform GHG levy administered by an IMO fund | Mimics EU ETS; revenues for climate vulnerable States. |
| India | “Bridging Mechanism” – costs only on under-compliant ships, rewards Zero or Near Zero (ZNZ) fuels. | Aligns with the Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) principle; prevents penalizing early movers. |
| Singapore | Hybrid model: GHG Fuel Standard (GFS) + tiered remedial/surplus units (built on India’s idea) | Marries the predictability of a standard with the flexibility of trading. |
OUTCOME & NEXT STEPS:
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- MEPC‑83 adopted Singapore’s hybrid model as the draft Chapter 5 of MARPOL Annex VI; formal adoption is scheduled for an extraordinary session in October 2025.
- The amendment will circulate for six months; final entry into force requires no written objections from ≥ 1/3 of Parties representing ≥ 50 % of world tonnage.
- If objections arise, the measure could be stalled until MEPC‑84 (Spring 2026) or scrapped, underscoring fragile consensus.
GEOPOLITICAL ALIGNMENTS
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- United States (under the Trump administration) abstained and threatened “reciprocal measures” against an EU‑style flat levy, reflecting domestic rollback of climate mandates.
- Oil exporters — Saudi Arabia, Qatar, United Arab Emirates, Russia — voted “No”, fearing demand destruction for fossil bunkers.
- Small Island Developing States (SIDS) backed a steep levy to finance resilience funds.
- Traditional maritime powers like Greece criticised the €100 bn‑plus levy as “aggressive and unrealistic”.
- Norway & Scandinavia sought credit for early LNG and battery ferries, advocating surplus‑credit banking.
INDIA’S POSITION & OPPORTUNITY MATRIX
| Indicator | Value / Status |
|---|---|
| Indian flag ships > 5,000 GT | 236 (of which 135 ply international routes) |
| Current bunker bill (international fleet) | ≈ USD 400 million / year |
| Estimated MBM cost (2030) | + USD 108 million (~27 % increase) |
| Ports with planned green hydrogen bunkering | Deendayal (Kandla), Paradeep, V.O. Chidambaranar (Thoothukudi) |
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- Economic Impact: UNCTAD models show freight‑cost pass‑through of 5–8 % on Indian trade by 2030 — manageable amid productivity gains.
- Strategic Upside: Under the National Green Hydrogen Mission (₹ 19,744 crore), India aims for 5 million t green H₂ by 2030; “well‑to‑wake” intensity (≤ 2 kg CO₂e/kg H₂) already passes IMO’s 2034 threshold.
- Port Decarbonisation: Harit Sagar – Green Port Guidelines 2023 mandate renewable‑energy sourcing, electric equipment and hydrogen bunkering; four major ports now generate surplus green power.
KEY ISSUES & CHALLENGES:
| Challenge | Evidence |
|---|---|
| Equity versus Universality — dilution of ‘common but differentiated responsibilities and respective capabilities’ (CBDR RC) | The hybrid levy applies the same price signal to all flags; yet, the per-capita merchant fleet tonnage of the OECD is approximately six times that of the Least Developed Countries. UNCTAD’s 2024 impact study projects freight cost pass-through of 5 – 8 % for India by 2030, rising to ~34 % by 2050; SIDS demand revenue recycling to climate resilience, while Brazil, China, and Saudi Arabia fear loss of commodity competitiveness. Brazil has formally requested the removal of the levy, citing WTO jurisprudence on special and differential treatment. |
| Technological Readiness & Safety Codes | Only 14 % of newbuild tonnage is alternative fuel ready, and most orders are dual-fuel hedges. Although interim guidelines exist for methanol and fuel cells, ammonia and hydrogen are still at a draft stage under the IGF Code, leaving flag States to rely on case-by-case dispensations. |
| Carbon Leakage Risk & Flags of Convenience | Differential regimes can divert transshipment to non-levy ports (e.g., Tanger-Med, East Port Said) or encourage reflagging to open registries, undermining aggregate abatement. The EU ETS maritime extension has already identified North African ports as “leakage hotspots”, prompting Commission monitoring. Academic modelling warns that medium-range container loops could add 7–11 % voyage distance to avoid carbon costs, paradoxically increasing emissions. |
| Financing the Retrofit Super cycle | The International Energy Agency estimates the capital bill for zero-carbon vessels, including onboard carbon capture and green bunkering, at USD 1–1.5 trillion by 2050; DNV estimates an additional USD 8–28 billion per year just to meet the 2040 intensity target. Developing-country fleets face credit-rating constraints despite voluntary initiatives. India’s Maritime Development Fund (₹ 5,000 crore seed) is a fraction of the USD 8 billion equity required to green retrofit its 135 deep-sea ships. |
| Data, Monitoring & Life Cycle Analysis (LCA) Gaps | The draft IMO LCA guidelines for “well to wake” emissions remain voluntary and differ from the European Union’s default factors. Disparate methodologies can increase compliance costs by 20–30%, incentivizing “data shopping.” Digital MRV (Monitoring, Reporting & Verification) systems are uneven: 97 % of global tonnage reports into the IMO’s Data Collection System, but only the EU MRV demands third-party verification, creating audit asymmetry. |
| Regulatory Fragmentation & Double Counting | Shipowners now juggle a patchwork of instruments: IMO levy (global), EU ETS (regional), national carbon taxes (e.g., Japan 2028), and private charterer clauses. Overlapping schemes inflate administrative overheads (DNV models: +15 % transaction cost) and generate legal uncertainty over whether a regional payment offsets IMO obligations — a problem reminiscent of the Kyoto Protocol/ETS “supplementarity” debate. |
| Port & Bunkering Infrastructure Bottlenecks | Only three of India’s 12 major ports (Kandla, Paradeep, Thoothukudi) have announced green hydrogen bunkering by 2027, whereas MEPC timelines require availability in all world regions by 2030. The International Association of Ports and Harbors warns that USD 60 billion in berth and storage upgrades is needed globally to handle cryogenic ammonia and compressed hydrogen, yet no multilateral window currently finances port side risk. |
| Human Capital & Safety Culture | The shift to toxic or cryogenic fuels raises seafarer training demands; the IMO’s STCW Convention has yet to integrate competencies for ammonia toxicity or hydrogen embrittlement. Indian Maritime University estimates 40,000 officers need up skilling this decade, but cadet intakes are falling 8 % annually post COVID 19, risking a manpower crunch. |
THE WAY FORWARD:
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- National Maritime Carbon Market Sandbox: Launch a multi‑port pilot allowing Indian ship‑owners to earn tradable “Blue Credits” for exceeding IMO fuel‑intensity targets; credits can offset deficits or be sold to foreign operators calling at Indian ports. This leverages India’s proposed bridging mechanism and positions the country as an early liquidity provider while stress‑testing Monitoring, Reporting and Verification (MRV) protocols.
- Green Shipping Transition Fund (GST‑Fund): Capitalise the planned Maritime Development Fund with a dedicated USD 2 billion window—co‑financed by World Bank Green Shipping Facility—to subsidise retrofits, green‑fuel bunkering and R&D in indigenous fuel‑cell technology. Tie disbursements to quantifiable emission cuts, echoing the Performance‑Linked Incentive template in manufacturing.
- Carbon‑Neutral Port Clusters under Sagarmala 2.0: Designate three “Green Gateways” (Kandla, Jawaharlal Nehru Port and Visakhapatnam) to achieve net‑zero operations by 2030, integrating shore‑power, electric yard equipment and hydrogen bunkering. Use the Harit Sagar metrics for third‑party verification and create demonstration effects for private minor ports.
- India‑SIDS Resilience Compact: Earmark 15 % of future IMO Net‑Zero Fund rebates earned by Indian surplus units to a trust that finances cyclone‑resilient port infrastructure in Indian Ocean Small Island Developing States. This diplomatic gesture enhances India’s Security and Growth for All in the Region (SAGAR) doctrine and counters criticism of levy inequity.
- Green Corridors with Scandinavia and Japan: Conclude bilateral “Green Shipping Corridor” agreements—Chennai‑Oslo and Mumbai‑Yokohama—focusing on methanol‑fuelled container services by 2028. Transfer Norway’s battery‑hybrid know‑how and Japan’s liquefied hydrogen carrier expertise, accelerating technology diffusion and lowering first‑mover costs.
- Maritime Skills & Safety 4.0 Mission: Upgrade Indian Maritime University curricula to include hydrogen‑handling, ammonia safety and onboard carbon‑capture operations; reskill 40,000 seafarers by 2030 under a Digital Apprenticeship Scheme. Human‑capital investment pre‑empts crewing bottlenecks that could delay India’s uptake of zero‑emission vessels.
THE CONCLUSION:
The IMO’s draft Net‑Zero Framework marks a paradigm shift from voluntary targets to enforceable climate obligations in a truly global industry. For India, the levy is not merely a compliance cost, but a strategic springboard—aligning maritime policy with the National Hydrogen Mission, Maritime India Vision 2030, and the Panchamrit net-zero pledge for 2070.
UPSC PAST YEAR QUESTION:
Q. Discuss global warming and mention its effects on the global climate. Explain the control measures to bring down the level of greenhouse gases which cause global warming, in the light of the Kyoto Protocol, 1997. 2022
MAINS PRACTICE QUESTION:
Q. Discuss the technological, infrastructural, and regulatory steps India must take to emerge as a global hub for green marine fuels. Examine the alignment between the National Hydrogen Mission and the IMO’s emission reduction thresholds.
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