The Secretary-General of the International Maritime Organization (IMO), Arsenio Dominguez, has told a panel that he remains confident that the first global pricing mechanism for shipping will be adopted next month as scheduled, as industry representatives backed the framework and warned against the risk of regulatory fragmentation.
Speaking at the Headline Conference of the London International Shipping Week on Wednesday (17 September), Dominguez insisted on the importance of global regulation to create a level playing field for the industry.
Asked whether the United States, which has threatened retaliation against IMO member states that would vote in favour of the framework next month, has the power to derail the agreement, Dominguez responded: ‘We work on consensus at IMO. Every country has a right to express their views openly.
‘I work with 176 member states, I respect the views of all of them, and we move forward with the consensus,’ he continued.
There is ‘still enough support to keep moving forward,’ he later said, adding that the IMO ‘will address all concerns during the implementation phase.’
If a vote is called on the Net-Zero Framework at the extraordinary MEPC session in October, its adoption will require support from two-thirds of the 108 countries that are party to MARPOL Annex VI, present and voting.
Concerns of regulatory fragmentation
Industry representatives speaking on the same panel also expect the IMO Net-Zero Framework to be adopted.
While acknowledging he ‘would have been more confident three or four months ago,’ Jan Dieleman, President of Cargill Ocean Transportation and Chair of the Global Maritime Forum, believes that ‘we should be getting it over the line.’
‘We can’t ignore that there are bigger powers at play than just shipping,’ he told the audience.
But he warned that the alternative to the IMO framework would be regulatory fragmentation, which he said would be a worse outcome for the industry.
The Head of Regulatory Affairs at Zodiac Maritime, Katy Ware, also expects the framework to go through, and warned that the ‘proliferation of regional measures is not good for the industry.’
‘Bringing about that level playing field on a commercial aspect will go a long way,’ she commented.
She pointed out that what happens between the framework’s adoption and its entry into force in 2027 will be critical, referring to the development of guidelines on aspects including the lifecycle GHG analysis of fuels.
‘October is big. What happens afterwards is even more important,’ she insisted.
‘Things are happening’
In a separate panel focused on technology and innovation, NorthStandard’s Managing Director, Paul Jennings, also emphasised the importance of a level regulatory playing field.
‘There does need to be a level playing field to give people involved in shipping the space to invest,’ he said.
‘To have fragmented regulation is horrible friction,’ he added.
Karrie Trauth, EVP and Global Head of Shipping & Maritime at Shell, remarked that there is a growing appetite in the industry for energy efficiency technology, and said it has become easier for the industry to invest in systems such as shaft generators and air lubrication.
‘Where there is something proven, there is a quick appetite to adopt,’ she said.
Emanuele Grimaldi, Chairman of the International Chamber of Shipping (ICS), also highlighted that technology is progressing at pace, notably on more energy-efficient designs.
‘We’re not talking about something that might happen. This is happening,’ he told the conference, referring to new ship concepts that can save 50% fuel compared to previous generations of vessels.
But he insisted on the importance for regulation to incentivise first movers. ‘Things are moving, but we need to be encouraged with rewards,’ he illustrated.
Related: ‘Fragmentation is costly for everyone,’ says MOL CEO
Photo: IMO
