To anyone following the debate over CO2 regulation at IMO, it is clear that Japan’s EEXI proposal (the Energy Efficiency for Existing Ships Index) has come under heavy criticism recently.
But what is the controversy all about?
An article in maritime news site Splash247 gives three main reasons.
Firstly, and most simply – because it won’t meet government’s existing commitments. A key goal of the IMOs Initial Strategy is to reduce shipping’s greenhouse gas (GHG) emissions “as soon as possible”. EEXI fails this test because it “will not put the sector’s gigantic CO2 emissions on a downwards trajectory. It purposefully allows emissions to keep rising for another decade or two, with no end in sight.”
Secondly, it’s merely a “technical” measure, meaning it regulates ships’ efficiency on paper, ignoring real world emissions and fuel consumption. This was precisely the flaw in the emissions regulation regime for road vehicles that enabled the “dieselgate” scandal, in which German car marker VW was forced to pay fines of $25 Billion.
As Splash247 explains, “With high financial stakes, Japan’s “technical measure” pries open the door for shipowners inclined to be equally ingenious as the car companies in gaming such a system.” If even a few shipowners can cheat Japan’s “Engine Power Limitation” software proposal, it could lead to huge fines, and tarnish our whole industry as corrupt and unprofessional.
Thirdly, enforceability. According to the Splash247 article, the problem with EEXI is that “Unlike vessel speed or fuel consumption, which are publicly verifiable, the question of whether a piece of software intended to regulate shaft power was switched on or off aboard a ship far at sea is hard to determine. This would make it difficult or impossible for regulators to check whether real CO2 reduction had taken place.”
These three reasons on their own are pretty damning.
But it’s not just the maritime press that is criticising EEXI.
The most widely-read business news site in the world, Forbes, has slammed EEXI as leading to “complex standards, unusable technology and unavoidable red tape.”
The Forbes article goes on to argue that “Letting industry interests set environmental regulation at levels which are already being met, so no change is needed, is highly disingenuous for the public. It is certainly not serving the interests of the people of Japan (or Mauritius) in a safe and stable climate system.”
Given this high-profile criticism of EEXI, it’s probably fair to say that any delegation supporting this flawed policy risks reputational damage.
Such delegates are also likely to face serious questions from their own citizens about why they failed to take action to protect them from the escalating threats of climate change.