‘Shipping in light version of European Emissions Trading Scheme’

The European shipping sector will fall under the European Emissions Trading Scheme (EU ETS). This will only apply to transport in European waters. Last week, the World Shipping Council strongly criticised the ETS scheme for shipping.

This will be announced by Commission President Ursula von der Leyen on Wednesday, says Danish ShippingWatch on the basis of a draft Commission climate action plan, which ShippingWatch says it has. It is as yet unclear when European shipping companies will have to buy emission rights.

The leaked document also shows that the Commission wants to tighten the target for reducing CO2 emissions from shipping considerably. By 2020, this should already be reduced by 55 per cent in comparison to 2008, instead of the 30 per cent as agreed within the IMO. Brussels had previously set the target at 40 per cent.

Modalities

According to the committee document, the transport sector has the smallest share of renewable energy, at 7 per cent, and all modes of transport – road, rail, air and water – should contribute to the 55 per cent reduction effort. ‘That is why aviation and shipping need to do more to make planes and ships more efficient and to increase the use of low-carbon fuel,’ said the Commission.

The Commission says it is committed to international cooperation with the IMO, provided it leads to ‘efficient action’. If not enough is done at a global level, the Commission is ‘ready’ to look again at the Emissions Trading Scheme. It also wants to give ‘new political attention’ to tax and fuel policies for aviation and shipping. This should lead to a decarbonisation of the transport sector’s fuel consumption worldwide.

World Shipping Council

Last week, the World Shipping Council (WSC) said it had ‘serious concerns’ about the planned ETS for international shipping. Although a described as a “regional” system, bringing international shipping into it using the Monitoring, Reporting and Verification (MRV) of carbon emissions scope ‘would regulate the operation of ships on several of the world’s seas and oceans, including on the high seas and in waters adjacent to non-EU nations’ according to the organisation.

‘The cargo concerned is not just EU imports and exports; it is also the imports and exports of the EU’s trading partners,’ stressed WSC President and CEO John Butler. ‘This will create trade tensions and raise legal and diplomatic concerns about the geographic reach of a unilaterally imposed emissions charge. The EU would be well advised to avoid extraterritorial application of the ETS.’

If the geographic scope is the same as the MRV GHG reporting regime, the system would also cover significant cargo volumes that are not part of EU trade at all, but are trans-shipped through EU ports. This would include numerous less-developed countries (LDCs) that would face an extra charge on their trade simply because their goods are routed through the EU.

The WSC says it is ‘equally troubling’ that the ETS would harm the prospects for a comprehensive global solution through the IMO. ‘Ironically, far from galvanising efforts in the IMO to implement global measures to curb CO2 emissions, an EU ETS is more likely to prevent a global solution. It is unlikely that a government that has set up its own revenue-generating emissions system will dismantle it in favour of a global one,’ Butler observed. According to him, the IMO ‘is the only place where a global solution can be reached.’

This article is partly based on an article published on Nieuwsblad Transport, a publication of SWZ|Maritime’s publishing partner Promedia.

Picture by Mark König.

Author: Mariska Buitendijk

Mariska Buitendijk is one of SWZ|Maritime's journalists as well as the magazine's copy editor.