New Maritime Emissions Pact: Implications for India and Global Shipping

Understanding the Latest maritime emissions Pact

The recent pact on maritime emissions, adopted at the 81st session of the International Maritime Organization’s Marine Environment Protection Committee (MEPC), marks a significant advancement in global efforts to combat climate change. Known as the Revised GHG Strategy, this agreement aims for net-zero greenhouse gas emissions from international shipping by around 2050. It includes indicative checkpoints for 2030 and 2040, focusing on reducing the carbon intensity of marine fuels and promoting low- and zero-emission technologies.

Innovations like green ammonia and methanol are currently being tested on major shipping routes by companies such as Maersk and MOL. The pact mandates that all IMO member states adopt mid-term measures by 2025, which will be implemented from 2027. This includes establishing a Global Fuel Standard and possibly a market-based mechanism like a GHG levy.

India's Position in Maritime Emission Negotiations

During the negotiations, India advocated for the "well-to-wake" approach, which evaluates the total lifecycle emissions of fuels from production to end use. This perspective is crucial for India, considering its reliance on various fuel imports, each with differing upstream emissions profiles. Notably, India is investing in biofuels and green hydrogen derivatives under its National Green Hydrogen Mission.

India opposed uniform carbon pricing, arguing that it could adversely affect developing nations by increasing shipping costs, thereby impacting exports. For example, higher shipping costs could hinder India's textile exports to Europe if the European Union-style Emission Trading Schemes (ETS) become global without flexibility.

Impact on Developing Countries

The new strategy could lead to increased freight costs and operational expenses due to more expensive fuels, vessel retrofitting, and compliance with new regulations. Countries like India fear a "green wall," where trade becomes prohibitively expensive due to climate-related non-tariff barriers. To mitigate this, India has requested:

• Capacity building and technology transfer
• Financial assistance through the IMO’s Integrated Technical Cooperation Programme
• Recognition of Common But Differentiated Responsibilities (CBDR) in maritime governance

Currently, India's logistics costs hover around 13–14% of GDP, which is considerably higher than the global average of approximately 8%. The transition to greener fuels could further burden key sectors like agriculture exports and marine products.

Practical Measures and Implementation

The pact outlines three primary pathways for implementation:

• Technical measures: Implementing fuel GHG intensity standards by 2027
• Economic measures: Introducing market-based tools like levies or emissions trading to incentivize compliance
• Monitoring frameworks: Establishing global data systems to track emissions and fuel performance

One pilot initiative, the Green Shipping Corridor, connects ports like Los Angeles and Shanghai. India may replicate this model on routes such as Mundra–Rotterdam or Mumbai–Singapore, focusing on port electrification and green fuel bunkering.

The Importance of shipping decarbonisation for India

Shipping accounts for over 90% of India’s international trade by volume. However, the environmental cost is escalating due to rising emissions of CO₂, NOx, SOx, and black carbon. Climate-related risks like sea-level rise and cyclones pose direct threats to India’s major and minor ports.

Greening the shipping sector can:

• Reduce dependency on imported fossil fuels
• Create green jobs in shipbuilding and fuel supply chains
• Enhance India’s position in emerging green supply chains, especially with the EU’s Carbon Border Adjustment Mechanism (CBAM) set to take effect in 2026

India's Preparatory Steps for Maritime Energy Transition

India has initiated several programs to prepare for this maritime energy shift:

• Launching the National Green Hydrogen Mission to promote green hydrogen in maritime transport
• Implementing port electrification projects at locations like Kochi and Chennai
• Establishing LNG bunkering stations in Gujarat's Hazira and Dahej ports
• Encouraging eco-friendly shipbuilding through the Sagarmala project
• Collaborating with Norway and Japan on low-emission shipping initiatives

Additionally, India has proposed a voluntary carbon fund at the IMO to assist developing countries in transitioning to cleaner shipping practices.

Global Examples of Implementation

Globally, the EU’s ETS will apply to shipping from 2024, potentially influencing international standards. Similarly, Singapore’s Maritime and Port Authority has mandated biofuel trials, while Japan and South Korea have adopted National Action Plans with specific GHG targets. These actions will shape how shipping routes evolve and how countries like India adapt to these changes.

Broader Implications for Indian Trade and Diplomacy

India must navigate the balance between economic growth and global compliance. Diplomatic efforts are focused on advocating for fair climate governance in trade and transport. Strategically, aligning with global agreements enhances India’s green leadership role within the Global South, while economically, it drives the modernization of infrastructure, reduces logistics costs, and fosters the development of green ports and shipyards.

Frequently Asked Questions (FAQs)

Q1. What are the main goals of the Revised GHG Strategy?
Answer: The Revised GHG Strategy aims for net-zero greenhouse gas emissions from international shipping by 2050, with interim targets set for 2030 and 2040, focusing on reducing carbon intensity and transitioning to low-emission technologies.

Q2. How does India’s stance influence the maritime emissions pact?
Answer: India's advocacy for the "well-to-wake" approach emphasizes lifecycle emissions, impacting the evaluation of fuels and ensuring that measures support developing nations without imposing undue costs.