News

By David Trench, WasteFuel CEO

This week, the 83rd Marine Environment Protection Committee (MEPC) will kick off in London at the International Maritime Organization’s headquarters. It may prove to be one of the most consequential meetings the organization has ever convened.

The delegates are tasked with coming to consensus on mid-term GHG reduction measures that will apply to the whole industry—if done well, catalyzing a sustainable transition for the whole maritime industry, with new markets, public-private collaboration, and innovation across the value chain. If done poorly, this measure could further extend the industry’s reliance on legacy fuels and make it more challenging for low-carbon fuel markets to rapidly scale to meet demand.

As a producer of low-carbon fuel for the maritime industry, WasteFuel is watching this week closely. With a global portfolio of projects (including the recent FEED announcement on our project in Ankara, Turkey), we recognize the value of industry-wide incentives on decarbonization. The green marine fuels industry needs this kind of regulatory certainty on the path forward, as it can spur industry demand, public and private investment in new projects, along with new compliance tools and efficient technology.

As of today, we have an indication of a proposed text for negotiation that includes gradually tightening requirements for the GHG fuel intensity (GFI) of ships to 2050. Like similar regimes in the EU, shipping companies may have the option to pool or bank compliance surpluses, with monetary penalties for under-compliant ships. While this may spur some shipping companies to adopt greener practices, the real questions this week will test the organization’s ambition: How persuasive can these penalties become and whether this measure will be enough to meet the IMO’s goal of Net Zero by 2050.

To accelerate near-term decarbonization, fuels like green methanol are essential: Utilizing proven technologies, production can scale in today’s energy landscape and evolve into even lower carbon operations over time. The industry has embraced it as a practical solution and now it is imperative the IMO recognize green methanol—a fuel that can reduce emissions between 65%-90%—for the powerful role it can play if properly incentivized.

The proposed text also includes the creation of an IMO Net-Zero Fund that would manage revenues from GHG emissions penalties. The Fund would distribute those revenues to reward the use of zero or near-zero GHG emission technologies, fuels and energy sources (ZNZs), and support a just and equitable transition in developing countries. We would stress the importance of funds that can be efficiently deployed to finance well-identified gaps in project finance. This will enable fuel producers to innovate and scale their technology to meet the immense potential for demand in 2030, when over 300 methanol-enabled ships will be in operation around the world.

Compared to maritime shipping, no other industry is so intertwined with the global trading system, a system that carries 80% of the world’s imports and exports. Every percentage of progress on maritime decarbonization carries impact for every good transported on a cargo ship—every pair of Nike shoes, Ikea sofa, or Lego set. It is imperative the delegates come to a consensus this week on a plan that both satisfies the decarbonization goals of the industry and supports the innovative ecosystem growing around this opportunity.