Abstract

The shipping industry is regarded to constitute almost 90% of international commodity trade and is equally held responsible for as much as 3% of greenhouse gas (GHG) emissions recorded globally arraigning it as one of the significant contributors to sustainable environment decline. In 2018, pursuant to the International Maritime Organisation (IMO) introduced a vision to Decarbonise the International Maritime Industrial Sector and presented a milestone road map to be revisited from time to time titled ‘Initial IMO Strategy on the Reduction of GHG Emissions from Ships’ . Today, in 2024, despite regulatory efforts by the IMO, including emission control, mitigating pollution from the shipping industry is a monumental task and a slow-changing course enough to contribute to the fight against climate change. The results from the stakeholders of the industry continue to point towards voids within the international legal framework that hinder effective contributions to fighting climate change. The aim here is to critically examine obstacles that are formed at the touchstone of IMO and its efforts and focus on regulatory, enforcement, and technological challenges befalling the Maritime Industry by evaluating the present existing obstacles and foreseeing the future obstacles that may impede the effective implementation of decarbonisation within the Maritime Industry.

KEYWORDS: Maritime Law, Maritime Policy, Decabonisation, Shipping, Marine Environment, Environment Sustenance, MARPOL, Marine Pollution, International Trade, Maritime Trade Future.

IMO & its Efforts In Mitigating Pollution

IMO is a non-judicial global industry accepted body constituted under the 1948 United Nations Convention on the International Maritime Organization. The initial focus was to streamline the Maritime Industry and on maritime safety and navigation. The IMO initiated a comprehensive programme with the main aim of reducing levels of pollution of the water and determining the entity that would compensate or would be liable in case of any harm done to the marine bodies. This was the aftermath of increased awareness among people of the hazardous nature of oil leaks which occur in marine bodies as a result of mishaps or improper handling procedures. Significant events that gravely damaged coastal and marine environments, such as the Exxon Valdez spill and the 1967 Torrey Canyon tragedy off the coast of England, compelled IMO to take  action. The 1973 adoption of the International Convention for the Prevention of Pollution from Ships, or MARPOL, was one significant result of the IMO’s establishment. Since its inception, MARPOL has concentrated on preventing many kinds of pollution from ships, including as oil spills, dangerous chemicals transported in bulk, dangerous materials in packages, sewage dumped into the ocean, and the removal of waste produced on board.

With the introduction of Annex VI in 1997, the IMO broadened MARPOL with an emphasis on lowering ship-related air pollution. Reduction of particulate matter, sulfur, and nitrogen oxide emissions was the main concern. In light of these initiatives, in 2011, IMO was the first global authority in the marine transportation sector to impose energy efficiency criteria that are applicable to all ships, regardless of where they operate or which country they are from. With the goal of reduction the greenhouse gas emissions caused by international shipping, regulations governing shipboard incinerators, reception facilities, volatile organic compounds, ozone-depleting chemicals, and fuel oil quality can be found in MARPOL Annex VI. The human health and air quality are significantly improved by these rules, especially for the people who live in coastal and port cities.

The IMO developed a plan in 2018 to lower ship-related greenhouse gas emissions. Their objective is to gradually and progressively eradicate these pollutants. In order to accomplish these aims, the plan lays forth ambition levels for the global shipping sector, highlighting the significance of new technology and the widespread adoption of alternative fuels or energy sources. IMO urged that :

“ 1. Carbon intensity of the ship to decline through the implementation of further phases of the energy efficiency design index (EEDI) for new ships to review with the aim to strengthen the energy efficiency design requirements for ships with the percentage improvement for each phase to be determined for each ship type, as appropriate;

2. Carbon intensity of international shipping to decline to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008; and

3. GHG emissions from international shipping to peak and decline to peak GHG emissions from international shipping as soon as possible and to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008 whilst pursuing efforts towards phasing them out as called for in the Vision as a point on a pathway of CO2 emissions reduction consistent with the Paris Agreement temperature goals”

In 2023, IMO aggressively revised its strategy with a concentrated aim to align more with the International Paris Agreement for global temperature control . A clear perusal of the 2023 revised GHG Emission Guidelines indicates that efforts have been increased multifold to curb the effects of active shipping on the environment. Despite the ranging complexity of decarbonisation in the Maritime Sector, some aspects of progress in curbing consequences to the environment due to shipping have been witnessed such as inclination towards alternative fuels like battery operated, hydrogen, wind harnessing and biofuel have risen in a few shipping segments, and several instances of demands have come from the customer-facing (B2C); the container segment, where potential to exact a “green premium” from cargo owners exists to recompensate for higher operation costs. With the introduction of the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Index (CII), two IMO-led initiatives for ship design and efficiency, regulatory incentives have grown more potent. These initiatives have taken effect on January 1, 2023. Over the past two years, there has been an increase in demand for ships that can use lower-carbon alternative fuels like methanol and LNG, indicating a greater alignment with technology.

Parallelly, IMO has commenced its efforts in legalising the adoption of Maritime Autonomous Surface (MASS) Vessels through the vision of introducing an enforceable regulation called the MASS Code, 2025. Considering that the MASS Operations would propagate the environment sustainability as it would provide liberty in designing and naval architecture, yet, this would only prove to be a useful contribution once it has gained substantial momentum. Due to the potential non-human interface nature of MASS Vessels, there is a high probability to reduce the carbon footprint of vessels. Additionally, super-tech usage to reduce carbon footprint by being self-aware has also helped several shipping companies to indulge in various research and development of technologies and systems that, upon large-scale implementation, will cut down GHG emissions substantially. However, in 2024, while all of this is still in a future tense perspective, the Maritime Industry is poised with several challenges that impede the success of even near-zero GHG emissions from ships.

Understanding the Challenges Faced By Maritime Industry To Fight Industry-Specific Pollution

To begin the evaluation of the voids that persist in the present legal framework in Maritime Law & Policy, one must understand that the lacuna is the nature of the industry itself. The dualistic manner in which Maritime Law operates, one being in the form of regulation urged using Public International Law, the other being international standards of operations provided by the single, international industry-accepted regulatory body, IMO. Understandably, only ratification through the National Legislation of Member States of such regulations/guidelines would complement either of the aforesaid forms of regulation. Automatically, therefore, the first and foremost impediment is the non-binding nature of the IMO’s GHG reduction targets, leading to inconsistent commitments among member states. The disturbing part of this exercise was, that even as late as 2018, The International Maritime Organization (IMO) pushed industry stakeholders to cut overall annual greenhouse gas (GHG) emissions by at least 50% by 2050 compared to 2008 levels and to swiftly reach the peak of GHG emissions from international shipping. This objective is in accordance with the Vision’s efforts to eventually phase out emissions completely and the CO2 reduction path established by the 2015 Paris Agreement on Climate Change. Given such an ambitious task that was laid down in 2018 for the participants of the marine industry, The variability in the implementation of MARPOL Annex VI regulations across jurisdictions further convolutes this issue, as some countries lack the resources and infrastructure to enforce compliance effectively. Additionally, the current rules mainly focus on operational and technical measures, like the Energy Efficiency Design Index (EEDI) and Ship Energy Efficiency Management Plan (SEEMP). However, they do not include market-based measures (MBMs) that could encourage significant reductions in greenhouse gas emissions.

Enumerating the challenges today would not only pose a difficult task but also an inconclusive task as the challenges are evolving like the industry itself. The lack of infrastructure to profess an ambitious revolution in an industry that has been so dynamic is the primary challenge to overcome. Furthermore, Regulatory Challenges arising from International Law & Domestic Legislation, Enforcement of Regulations and Commercial and Financial barriers are other impediments that befall the fulfilment of the ambition.

Reiterating what is previously stated, the International Maritime Law and Policy aspect’s duality of being a homogenous composition of Public International Law and Regulations would need enforcement for successful implementation from the very fundamental issue of the pyramid of challenges that the IMO is progressively working towards overcoming. However, the ambitious decarbonisation targets, such as reducing carbon intensity by 40% by 2030 and 70% by 2050 compared to 2008 levels which presently are non-binding, lead to varying levels of commitment among member states. Without legally binding obligations, there is no guarantee that countries and shipping companies will meet these targets, reducing the overall effectiveness of the regulatory framework. It is an industry-wide accepted truth that MARPOL Annex VI, which addresses air pollution from ships, is implemented inconsistently across jurisdictions. Some countries lack the necessary infrastructure, resources, and expertise to enforce compliance effectively. This inconsistency creates a fragmented regulatory environment, allowing non-compliant ships to operate with minimal consequences in regions with weaker enforcement. Similar to the situation that has straight-jacketed the industry for recycling ships; to avoid strict sanctions and legal implications, safe havens have come in underdeveloped nations and non-member states to aid in circumventing stricter actions. This could include cheaper fuel, cheaper treatment of sludge, and marginalised oil processing all of which could make a magnanimous difference commercially to the industry participants.

Even with several regulations imposed for environment conservation such a low sulphur fuels, speed regulations and convoy navigation, the current regulations primarily focus on operational and technical measures, such as the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP). While these measures are important, they do not fully address the need for comprehensive market-based measures (MBMs) that could incentivise significant GHG reductions. The lack of MBMs, such as carbon pricing or emissions trading systems, limits the financial incentives for shipowners to invest in low-carbon technologies. Beyond Regulatory challenges, the Enforcement of environmental regulations in the maritime industry faces several hurdles such as Port State Control (PSC) a key enforcement mechanism face often faces limitations due to the capacity and resources of port states to conduct inspections and check proper implementation of International Regulations.

Needless to say, still issues such as maritime safety still need proper persuasive implementation, most PSC inspections typically prioritise safety and operational issues over environmental compliance, reducing their effectiveness in enforcing GHG regulations. Apart from PSC, another entity that regulates the vessels’ compliance with international regulations is the Flag State Controls. Ships are subject to the jurisdiction of the flag state nation, which is responsible for ensuring compliance with international regulations. However, many flag states, particularly those with open registries, may lack stringent enforcement mechanisms, leading to a “race to the bottom” in regulatory standards. Maritime history is bludgeoned with lapse Flag State Nations allowing multiple registrations to vessels, registering non-seaworthy vessels and even registering vessels which are sanctioned for non-compliance. Overcoming political impropriety for the sake of commerce and the environment is something that stalls continuity of business which is one thing that the Maritime Industry completely detests.

In the rare event that any of the enforcement agencies like the PSC or the Flag State do intervene and conduct supervisory action for the implementation of the guidelines for reducing GHG as per the IMO Strategy, the penalties for non-compliance with environmental regulations are often insufficient to deter violations. On the flip side, there is a lack of significant incentives for shipowners to invest in cleaner technologies and practices. Financial mechanisms such as subsidies, tax incentives, or green shipping funds are not adequately provided to support the transition to low-carbon shipping. That being said, it cannot be denied that participants have made striding attempts to align with the IMO Strategy. For example; AP Moeller-Mearsk, one of two leading container liners in the world has approached various shipyards with enquiries of ship construction rafts using LNG as fuel for almost 23 vessels of its potential fleet for the coming years. While such attempts do take substantially large steps towards the fulfilment of IMO’s vision, the fact that impediments and challenges that lace the handicapped infrastructure and regulatory system are not entirely eradicable becomes the hardest-hitting blow to the industry. A hypothetical assumption that all jurisdictional, legal and political stalemates are removed from the equation, clean energy comes at a superior premium. And the Technological and Financial Barriers for transitioning to low-carbon shipping faces significant technological and financial hurdles such as High Costs of Alternative Fuels and Technologies; The adoption of alternative fuels such as liquefied natural gas (LNG), hydrogen, and ammonia, as well as technologies like battery-electric propulsion, involves substantial upfront costs primarily in research and development and thereafter in implementation. The lack of financial incentives and support mechanisms further exacerbates this challenge.

Several of the numbered challenges can be remedied through amending law and policy, however, a significant leap in the journey of achieving even low-carbon shipping would require an exponential increase in the role of alternative fuels. Today, though, the infrastructure for alternative fuels is not yet fully developed, creating logistical challenges. The global supply chain for these fuels needs significant expansion to meet the demands of the shipping industry. Transitioning to alternative, environment-friendly fuels is crucial to mitigate the environmental impact of shipping. Alternative fuels such as liquefied natural gas (LNG), hydrogen, ammonia, and biofuels are still in various stages of development and commercial viability. Each of these fuels presents unique challenges: While LNG is currently the most mature alternative fuel, its ability to significantly reduce CO2 emissions is limited compared to zero-carbon fuels. Moreover, methane slip (the release of unburned methane during combustion) is a concern, as methane is a potent GHG by itself. Fuels such as Hydrogen and Ammonia offer significant potential for decarbonisation, but they face technological hurdles related to storage, handling, and safe usage onboard ships. Hydrogen requires storage at high pressures or low temperatures, while ammonia, being toxic and corrosive, necessitates advanced safety measures. Another alternative fuel recommendation is that of adopting biofuels, but the sustainability of biofuels depends on feedstock sources and production methods. Large-scale production may compete with food resources and lead to deforestation, raising ethical and environmental concerns.

It is needless to emphasize that continuous research, development and experimentation will provide an answer to the truest alternative fuel to fight carbon emissions as a by-product. Again, the Maritime Industry cannot depend on trial and error and consistent commodity trade is not only the lifeline of this business, and the world but also the very objective of this industry. Clearly, existing ship engines and fuel systems were primarily designed for conventional fuels; Retrofitting ships to accommodate alternative fuels involves significant technical challenges and costs. Different fuels require different handling and combustion systems, necessitating substantial modifications to current engine designs and auxiliary systems. Engines must be equipped with advanced emissions control technologies to minimise pollutants such as nitrogen oxides (NOx) and particulate matter (PM) in addition to CO2, which can be more challenging with certain alternative fuels.

Last in the pyramid of challenges comes the lack of infrastructure for producing, storing, and distributing alternative fuels. Presently, the fuels itself are underdeveloped. Establishing a global network of bunkering facilities for fuels like LNG, hydrogen, and ammonia requires substantial investment and coordinated efforts between governments and the private sector. The current lack of infrastructure hinders the widespread adoption of these fuels. Ports play a crucial role in the transition to alternative fuels. However, many ports are not yet equipped to handle the bunkering and storage of alternative fuels safely. Upgrading port facilities to accommodate new fuels involves significant logistical and financial challenges. Ports also need to develop the necessary expertise and safety protocols to manage these fuels. Integrating alternative fuels into existing shipping operations involves complex logistical challenges. The supply chains for these fuels need to be seamlessly integrated with current maritime operations to ensure reliable and efficient fuel delivery. This requires coordinated efforts between fuel producers, suppliers, shipowners, and regulatory bodies which is an infrastructural nightmare in itself.

Bridging the Void; Paving the course for 2050

The transition to alternative, environment-friendly fuels in the shipping industry is fraught with challenges across technological, financial, regulatory, and infrastructural domains. Addressing these challenges requires a multifaceted approach, involving coordinated efforts from international regulatory bodies, governments, the private sector, and financial institutions. Developing mature technologies, creating supportive regulatory frameworks, securing financing, and building the necessary infrastructure are essential steps toward achieving a sustainable and low-carbon future for the maritime industry. Continuous Research and Development is crucial for advancing low-carbon technologies. However, there is a lack of coordinated international efforts and funding to support such initiatives. Effective decarbonisation requires coordinated global efforts. The fragmented nature of international regulations and the varying levels of commitment among countries impede the development of a unified approach to reducing GHG emissions. Enhanced collaboration among international organisations, governments, and industry stakeholders is necessary to create cohesive and effective regulatory frameworks. Addressing these challenges requires strengthening regulatory commitments, harmonising implementation and enforcement, introducing market-based measures, enhancing port state control, improving flag state oversight, providing financial support, and investing in R&D and infrastructure. By tackling these issues, the international community can create a more sustainable and environmentally conscious shipping industry, achieving meaningful reductions in GHG emissions.

Decarbonising the shipping industry is imperative to mitigate its significant impact on climate change. While the IMO and other international bodies have made strides in establishing regulatory frameworks, substantial gaps remain in terms of regulatory commitments, enforcement, and technological advancements. The decarbonisation of the shipping industry is a pressing global imperative that requires coordinated efforts across various sectors. Key recommendations include establishing a universal regulatory framework to ensure a level playing field for all ships, regardless of their flag of registration or country of ownership. This framework should aim to minimise uncertainty, which currently hinders investment decisions and consequential issues arising from lineneancy of jurisdictions. Additionally, substantial funding for research and development in clean-fuel technologies and infrastructure is crucial. Encouraging investors and financial institutions to boost funds for these initiatives will be vital in accelerating the transition to low-carbon fuels. Furthermore, introducing a levy on fuels or a carbon price can make alternative fuels more competitive, while generating funds to support smaller and vulnerable economies in their transition to a green and just low-carbon future.

The urgency of this transition is underscored by the projected growth in maritime trade, which could increase between 40% and 115% by 2050. This growth will significantly impact global energy demand and carbon emissions if left unchecked. Therefore, it is essential to prioritize the development of new vessel designs and engines, particularly those fuelled by renewable energies. Identifying key trading and bunkering ports, navigation routes, and choke points will also be critical in fast-tracking the energy transition. In the Indian context, the potential of clean technologies such as LNG and solar-assisted electric boats is significant,. A transition to these technologies can result in substantial emission reductions and market growth. However, a detailed techno-economic analysis is needed to compare nascent alternatives, including methanol, biofuels, and ammonia.

Leveraging the momentum built in transitioning to low-carbon fuels in road transport can also benefit the waterways sector in India. Ultimately, the decarbonisation of the shipping industry requires a multifaceted approach that balances economic, environmental, and regulatory goals. It necessitates bold global action, supported by robust policies, technological innovation, and sound multilateral regulation. By implementing these recommendations, the shipping sector can contribute to a sustainable and equitable future for all. Since development and deployment of alternative fuels such as hydrogen, ammonia, and biofuels already do promise directional progress and promising pathways. Hydrogen and ammonia, in particular, hold the potential for zero-emission propulsion, provided the hydrogen is produced using renewable energy sources. Implementing slow steaming practices, optimising vessel design, and utilising advanced hull coatings can reduce fuel consumption and emissions. Additionally, the use of digital technologies for route optimisation and predictive maintenance can enhance operational efficiency. For instance, real-time data analytics can help identify the most fuel-efficient routes and maintenance schedules, thereby reducing unnecessary fuel burn.

Financial incentives and market-based methods are key to promoting green technologies. Implementing carbon pricing, like carbon taxes or cap-and-trade systems, can encourage shipping companies to invest in low-carbon solutions. Green financing solutions, such as sustainability-linked loans and green bonds, can also provide the money required to build new, environmentally friendly ships and renovate old ones. Stakeholder cooperation is necessary to successfully implement these techniques. Governments, regulatory bodies, shipping companies, fuel producers, and technology developers must work together to create a cohesive framework. Public-private partnerships can facilitate the sharing of knowledge, resources, and best practices, thereby accelerating the transition to a low-carbon shipping industry.

One such impressive attempt is that of the Climate Change Committee which is a time-based committee performing the objective of advising and supervising of reduction of carbon footprint in the United Kingdom sector-wise. It provides its advisory and assessment report based on which stakeholders of the sectors who are governed by the UK Government are directed to take necessary action to implement such advice contained in the advisory report. To achieve decarbonization in the shipping industry, the legal framework of international maritime law must be strengthened. A 20% decrease in greenhouse gas (GHG) emissions by 2030 and net-zero emissions by 2050 are only two of the challenging goals established by the International Maritime Organization (IMO). To ensure compliance and ease the shift to sustainable practices, this calls for a strong regulatory strategy. Legal instruments such as the implementation of a Cap-and-Trade system have provided economic incentives for emissions reductions, encouraging shipping companies to invest in low-carbon technologies. Furthermore, integrating market-based measures, like the EU Emissions Trading System, can effectively internalise the costs of carbon emissions, prompting industry stakeholders to prioritise sustainability in their operations.

The establishment of stringent local regulations at ports and navigation channels is crucial for curbing emissions and promoting the use of alternative fuel. This regulatory framework should be complemented by international cooperation to ensure that all seafaring nations have uniformly participated, contributed and are committed to this cause. Ultimately, a comprehensive legal framework that encompasses regulatory measures, economic incentives, and international cooperation will be vital for steering the shipping industry toward a sustainable and decarbonised future, aligning with global climate goals and ensuring environmental protection.

Author:

Harsh B. Buch, LL.B, LLM is an International Maritime Lawyer.

Editorial Team:

Managing Editor: Naman Anand
Editor in Chief: Abeer Tiwari & Harshita Tyagi
Senior Editor: Kaushiki Singh
Associate Editor: Parmi Banker
Junior Editor: Sarthak Kumar

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