News / MEPC failure threatens 'new era of fragmented, conflicting regional regulation'

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A rise in unilateral climate action spurred by the vote against the IMO global decarbonisation framework will see increased complexity that could favour large players. 

Albrecht Grell, MD of Oceanscore, told The Loadstar at the International Chamber of Shipping in London yesterday that the movement to delay the IMO’s decarbonisation measures by a year effectively meant the proposal had been rejected. 

“I just don’t see how [the voting countries] would find alignment in one year, unless the package is significantly altered,” he said. 

According to Mr Grell, this will see a stronger push for regional regulation rather than a unified framework, as countries in favour continue to progress with decarbonisation.  

Richard Meade, editor in chief at Lloyd’s List, explained at last month’s London International Shipping Week (LISW): “The alternative to the net zero framework, by the way, is not ‘no regulation’, it is every country for itself. It is lots of carbon taxes overlapping with no industry input into how the funds are spent.” 

The UK extension of the EU’s ETS scheme was one such example, said Mr Grell, also pointing to similar schemes in Tukey, China and the African Union. 

And he warned that once multi-regional schemes popped up, this would “really start to hurt”, as complexity, and therefore costs, increased. 

“In my view, this will not be cheaper than a global scheme,” he said. 

Indeed, Paul Jennings, MD of North Standard, had warned at LISW’s headline conference at the IMO: “Hopefully, the right decision will be taken in this building in a few weeks’ time, because to have fragmented regulation is horrible friction for the shipowners. It’s not effective, it’s not efficient.” 

A natural consequence of this, said Mr Grell, would be more players turning to digital solutions to help manage the increased complexity. But he warned that such technology often “favours the large players”. 

“If you think about MSC or Maersk, they have more capital and more expertise to build the software they need,” he explained, and noted that SMEs may seek to partner with solutions providers to help manage complexity for them. 

Alex Caizergues, CEO and co-founder of Syroco, told The Loadstar he believed digital platforms would be crucial to monitor performance, fuel management, route optimisation and carbon accounting, to meet and manage sustainability requirements in an “economically viable” and “cost-effective” way. 

Oceanscore summerised: “Let us hope that last week’s MEPC failure does not mark the start of a new era of fragmented, overlapping, and conflicting regional regulation.  

“The resulting inefficiencies would set the industry back on a scale we have never seen before. “