As the 84th gathering of IMO’s Marine Environment Protection Committee (MEPC) approaches, engine developer WinGD highlights the findings from a new report from two respected shipping and climate research institutions.
MEPC is about consider alternative structures for IMO’s GHG emissions reduction policy, following the adjournment ahead of a vote on the adoption of the Net Zero Framework (NZF) in October 2025. The company says that multiple structures have been proposed, many of which abandon core elements of the NZF. But according to the UCL Shipping and Oceans Research Group and the Rocky Mountain Institute, nothing short of a GHG pricing scheme will help to drive decarbonisation in global shipping.
WinGD CEO Dominik Schneiter points out that this tallies entirely with his company’s perspective. WinGD: “Fully supports the adopted goals of the IMO – namely to reach net-zero emissions from shipping by or around 2050 – and has developed the engine technology to help shipowners make an early transition to clean fuels. Without robust, effective incentives to drive this transition, we allow our industry to further endanger the climate and the planet. In that scenario, let us be clear – we all lose.”
The analysis in the UCL and RMI study is considered particularly impressive for its modelling of how shipowners actually approach fuel choices.
According to UCL Shipping and Oceans Research Group Senior Research Fellow Dr Marie Fricaudet, this is: “Cautiously, with limited foresight, and with one eye on their competitors.”
These behaviours are seen as entirely rational given current uncertainty around ZNZ fuel availability – and WinGD agrees that these are exactly the factors that make strong policy essential in order to accelerate the net-zero transition in line with IMO’s ambitions.
The study finds that: “Only architectures combining a GHG price, a capped surplus unit market, and a reward mechanism for zero- and near-zero (ZNZ) fuels create the conditions for an investable transition.”
This highlights one of the biggest flaws of the NZF as drafted. Although a ZNZ reward was considered, it was never specified. Yet this element is considered essential for allowing both fuel production scale-up and ship investment decisions. WinGD believes that this time around, a ZNZ reward needs to be settled early enough – and at a high enough value – to bring the net cost of green fuels in line with fossil sources.
But, according to the company, it’s not just about giving bonuses to those who use specific fuels. There needs to be a realistic, verifiable approach to both measuring emissions reductions and rewarding them.
The study argues that: “Failing to support early adopters in policy design carries significant transition risk.”
WinGD would thoroughly agree. In the NZF drafting, default emission factors risked locking in mature technologies and stifling innovation in lower emission solutions. A prime example is its own low-pressure two-stroke LNG engine, which was given a default methane slip factor nearly twice as high as the slip achieved with its current emissions-limiting technology.
Early adopters need to see the value in investing in new technologies. That is hindered by legacy default values that favour established solutions. MEPC needs to address this issue, not just as a correction in methane slip factors, but in a principle that treats all fuels and technologies fairly. The way to achieve that, according to WinGD, is to replace emissions intensity estimates with actual measurement of emissions.
WinGD’s own portfolio demonstrates how using emissions intensity as a basis for penalties can lead to irrational results. For example, a similar application using less fuel and generating lower emissions can be subject to higher penalties if the fuel-to-emissions ratio is less favourable. A focus on real, measured emissions would eliminate those inconsistencies and prevent virtue-signalling selections of fuel and technology that, ultimately, reward higher emissions.
Whether or not the IMO will succeed this time around is an entirely different subject. WinGD states that the global politics that downed the NZF are still in play, and have possibly become even more strident in the interim. But for all those that believe in limiting and reversing climate change – not only as a matter of principle but one of material consequence for our and future generations – the UCL and RMI study highlights exactly what needs to be achieved.
Image: Dominik Schneiter, WinGD CEO (source: WinGD)
