Practicability and Attractiveness

NOTE: Theses synopsis relate to the 1st generation of IMERS. The 3rd generation changes, including the rebate mechanism, are not reflected in the description below. These are provided for historical reasons.

The details of the scheme are provided below using two main criteria: Attractiveness and Practicability. Lessons learned have proved that successful schemes must combine policy appeal and economic efficiency with reliable data and feasible implementation. With some additional political will, the scheme can be operational even before 2012.

The mid-2007 IMERS synopsis, 1st generation (0.1 MB) used at the UNFCCC COP 13 in Bali meeting are included for comparison (note that the COP13 synopsis were based on the mid-2007 estimate of shipping emissions of around 0.5GtCO2; current estimates are double of that).


Scheme Design


  • Emission allocation:

-- (None1; using the UNFCCC SBSTA option 1 – no allocation)

  • Allowances distribution:

-- (None needed)

  • Participating entities:

Fuel payers for charges; ship managers and/or suppliers for reporting

  • Reporting, Verification and Compliance:

Direct electronic; compliance enforced in selected ports, both for the provision of data (such as BDN) and payment of charges

Implementation Feasibility

  • Accurate data & availability:

Emission growth: available

  • Minimum operational data:

Fuel data, used or delivered: available (starting with Bunker Delivery Notes, BDN)

  • Reuse of existing work, and procedures:

Voyage data for validation; CO2 index from real data once the scheme operates, used as a performance measure for ships, routes etc.

  • Authorities and their roles:

IMO for governance; World Bank, or similar,  to manage adaptation funding (recommended Adaptation Fund under the UNFCCC)

Scheme Parameters


  • Emission target:

Yes; enclosed calculations done for notional reductions of 20% in 2020, and 50% in 2050 from 2005 level

  • Emission baseline and/or emission growth:

Baseline not needed, and avoided as it is currently commercially inadequate.
Emission growth only needed (average 2.1% pa used till 2035)

  • Grouping for equity:

Bubbles for containers, bulk, tankers, etc., could further improve the scheme equity and speed up implementation

  • Time to implement:

2 years – could be operational BEFORE 2012


Scope and Goals


  • Geography:


  • Participants:

All vessels > 400 GT

  • Emission target:

Global, or per vessel bubbles (containers, bulk, tankers, …)

  • Additional goal:

Adaptation to climate change in developing countries

  • Emissions:

International, CO2 only at the beginning

Political Appeal


  • Common but differentiated responsibility:

Through financing policy for adaptation;  differentiation at point of distribution rather than collection

  • Impact on competitiveness:

None in sector; negligible outside shipping

  • Benefits to participants:

A hassle-free long-term solution, increased cash flow, compliance easily verifiable, long term investment clarity, better image of shipping

  • Legal basis & precedents:

Could be under MARPOL; IOPCF -  a precedent for a direct fund; aviation route charges as an example of delegating collection and billing responsibility to a central organisation (Eurocontrol in Europe)


(for 2010, key assumed prices: fuel $500/tHFO, carbon $30/tCO2)

  • Price impact:

Low: 0.1%, equivalent to adding $1 to price of $1,000 of imported goods

  • Participant costs:

Negligible          (20 minutes reporting time for ship managers per month)

  • Unit emission charge:

$10/tCO2 or $30/tFuel           (linked to emissions and carbon price)

  • Operational costs:

Under 5%           (a centralized solution; operational ratio higher in the initial years)


(assuming 1GtCO2 baseline in 2005; for others – multiply results by the respective baseline value in GtCO2

  • Emission mitigation:

$4bn/pa; Total mitigation of 26 GtCO2 by 2050         (30% of it is emission avoidance)

  • Improvements:

+0.5% annually, $2bn/pa Technology Fund, for transformational R&D and technology transfer

  • Adaptation:

$4bn/pa, for developing countries (likely as contribution to the UNFCCC Adaptation Fund)

  • Eligibility ("Carrot & Stick"):

Only parties that legally support the scheme are eligible to participate in the scheme benefits (adaptation, technology and so on)

  • Market linkages:

Cost-effective through usage of carbon markets, and a dedicated maritime emission registry



  • Mechanisms used:

CDM, CERs without limits; also programmatic CDM for increased quality

  • New and existing ships; and new entrants:

Applies to both existing and new ships; no problems with including new entrants as scheme is based solely on charges, rather than allowances

  • Adjusting to new realities:

Charge annually; funding policy reviewed and adjusted periodically by IMO

  • Starting small, and learning by doing:

Can be limited to ship type or size threshold; easy scaling up thanks to the harmonized charge that does not vary with the number of participants

1 The scheme avoids the complex problem of allocating emission allowances to countries, flags, routes or ships, and associated issues, such as lack of a reliable emission baseline, high transaction costs for small emitters etc. It achieves an emission cap on shipping emissions through a hybrid price-quantity mechanism that is linked to established emission markets, thereby delivering the reduction in the most cost effective manner.