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A first step: The IMO's regulation of shipping emission

Guest commentary by T&E's Bill Hemmings on Point Carbon.com.

Last month’s decision at the IMO to adopt an Energy Efficiency Design Index (EEDI) for new ships was a significant first step to address GHG emission from international shipping but it cannot be seen as a solution on its own.

Only new ships are affected, so the measure will take over 30 years to have full effect and the imple¬mentation waiver means it will be nearly 2020 before all new ship builds are required to comply.

The waiver and the accompanying commitments on technical assistance were directed at developing country concerns over accepting a global measure. Any waivers would be granted on a ship-by-ship basis. However IMO’s principle of equal treatment of ships and wish not to discriminate on the basis of flag, as China, Brazil and others so persistently pressed for, means that the waiver can in theory be enjoyed by any new ship built anywhere.

A non-EEDI compliant ship could be commissioned by a western owner and built in a western yard and sailed out to sea under a flag of convenience. More likely is that western shipowners will build non-EEDI compliant ships in the Far East and flag them out to a developing country. And possibly re-flag them back to an EU country shortly afterwards.

The question is will they? Or will western owners be more responsible? Some shipowners have said that it’s all a question of value (not morals!); that a non- EEDI compliant ship will have a lower resale value and uncertainty about port access or future charges associ¬ated with it, so owners wouldn’t take the risk. Maybe.

And in the scenario just outlined, it’s not clear whether EU member states would agree to such re-flagging. In either case, industry associations and individual ship¬owners should be happy to sign on to a code of conduct whereby all developed country shipowners publicly cer¬tify ship by ship their commitment to respect the intent of the IMO decision. NGOs would be happy to join with others and keep track of these commitments – assum¬ing we can keep track of the owners.

But there’s a role for governments here too. When the IMO considered the phased-in regulation requiring double hulled ships (which was used as a model for the EEDI phase-in), EU member states, having already uni¬laterally banned single-hulled ships, retained a specific provision in the IMO regulation reiterating their rights under the Law of the Sea to deny port entry to any ship. A similar reiteration was in the draft of the EEDI regulation and provoked consider¬able debate. It became linked to the question of how long the waiver should last – options ranged from 1 to 8 years. In the end, the EU and others made conces¬sions on the waiver length and also agreed to drop the proviso on denial of port entry.

Having gone way beyond the reasonable to secure an agreement on EEDI, EU governments and the European Commission have an obligation to make it clear publicly that non-EEDI compliant ships enjoy¬ing the waiver and owned by EU interests will not be welcome at EU ports whatever their flag. EU ports should in turn levy port charges according to whether a ship is EEDI compliant or not and require all visiting ships to have a calculated EEDI. Ship labelling is not far away now.

As to EU action on shipping, the first priority is for the EU to press the UNFCCC’s year-end talks in Dur¬ban to have the IMO agree quickly on one of the op¬tions to tackle the sector’s emissions, such as a global levy or emissions trading, based on the principle of no net incidence (i.e. developing countries would receive a rebate of all revenues collected according to a key, possibly their share of global imports). This is the pro¬posal of the UN Secretary General’s High Level Group. With some courage, the EU could make the difference at Durban.

Without it, the option facing EU governments in early 2012 will require even greater courage; to decide on an EU shipping measure. By then the decision of the European Court of Justice on the legality of the inclusion of aviation in the EU ETS will be known. The post-EEDI prospects for progress at the IMO on market-based measures are unclear. EEDI as now approved, will barely reduce shipping emissions by 1 percent by 2020 by which time shipping will account for 6 percent of global CO2.

The EU is committed to reduce transport emissions by over 60 percent by 2050 and maritime emissions by at least 40 percent. Had, in 2006, the EU waited for global action on aviation by ICAO they would still be waiting. Now is the time for shipping. Studies on options are getting serious. Before too long, an EU Directive will start taking shape.