UN shipping rules targeting carbon emissions provoke storm of criticism

Shipping companies could exploit loopholes in upcoming UN regulations targeting carbon emissions, industry insiders have warned, potentially limiting environmental progress in one of the world’s most polluting sectors.

Some executives in the sector have highlighted various weaknesses in the rules, which will require them to grade the carbon intensity of individual ships from next year, with others accusing certain member states within the UN’s International Maritime Organization of resisting tougher measures.

But the shipping industry has also come under fire from experts who say the regulations were watered down because of its own lobbying.

The so-called Carbon Intensity Indicator regulations are being introduced amid increasing pressure on shipping groups to become less polluting.

Based on historic emissions data, some 25 per cent of container ships are set to receive the lowest rating as well as 15 per cent of bulk and crude tankers, according to estimates produced by industry group Bimco and shared with the Financial Times. 

But with the IMO measures weeks away from being enforced, industry leaders said companies could find workarounds, rather than make meaningful progress towards decarbonisation.

“You can pull various levers [to improve your rating],” said Lars Robert Pedersen, deputy secretary-general at Bimco, adding that companies could reduce the carbon intensity of individual ships by distributing cargo across a larger number of vessels. The CII does not take a ship’s actual weight into account, meaning businesses could flatter their rating by not fully loading vessels.

“An improvement of the [CII] rating does not necessarily translate into something that is better for the environment,” Pedersen said.

Simon Christopher Bergulf, regulatory affairs director at Danish shipping group Maersk, said weak enforcement could also limit the impact of the measures. Although the lowest rated ships must produce a “corrective action plan”, the IMO has not mandated disciplinary measures for those who do not improve.

Bergulf suggested certain IMO member states had resisted stronger measures in order to protect national industries. Two people close to the negotiations added China in particular had opposed tougher rules.

But Tristan Smith, a shipping researcher at UCL, argued that parts of the private sector also lobbied for more flexible rules and exemptions, including for ships facing bad weather.

In 2019, Bimco and the International Chamber of Shipping called for the IMO to allow shipowners to select their own standards for measuring energy efficiency.

Although many of these recommendations were not adopted, “it all influences [the outcome]”, Smith said.

Aoife O’Leary, chief executive of campaign group Opportunity Green, said the industry was “basically saying [there should be exemptions] if there are storms at sea. All I could do is laugh.”

Bryan Comer, head of the International Council for Clean Transportation’s marine programme, said the IMO would have liked to take a ship’s weight into account when measuring carbon intensity. But the industry, including Bimco, previously lobbied against this data being collected for confidentiality reasons.

Pedersen said Bimco called for the IMO to allow shipowners to choose the metric most suitable for them because it is very difficult to create a standard that is appropriate for all. The ICS also said that it opposed a “a one-size-fits-all approach to regulation”, adding rough waters and “the practical experience of shipowners” should be taken into account.

The IMO said decisions on regulations were made by member states who “discussed intensively” the methods of calculation for the CII, adding that shipowners could use low-carbon fuels and a range of other methods to improve their rating.

It said “administrations and port authorities . . . are encouraged to provide incentives to ships rated as A or B [to send] out a strong signal to the market”, adding that the CII would be reviewed in 2026.

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here