EU prepares for unilateral shipping action

February 15, 2010

Plans for the EU to set greenhouse gas emission limits for ships using EU ports moved a step closer last month when the Commission published a new report looking at various ways of charging for maritime emissions. It concludes that emissions trading is the best and most feasible way of providing a financial incentive for reducing shipping's contribution to global warming.

With shipping a global industry, the EU’s preferred option is still to find a way of tackling greenhouse gases through the International Maritime Organisation (IMO). But with the IMO saying an agreement is likely to be several years away, the EU is pressing ahead with its commitment to introduce a system for EU ports if the IMO has no agreement in place by the end of next year.

Brussels commissioned a consortium led by the Dutch consultancy CE Delft (and including the former T&E president Per Kågeson) to look at various options. It looked at emissions trading, a carbon tax, efficiency standards, and a baseline credit system, plus an option based on voluntary action as a point of reference.

It concluded that emissions trading was the best and most viable option, as it would be politically feasible and difficult to evade. Ship owners would be responsible for reporting fuel use and obtaining emissions credits. It said emissions trading could reduce emissions by up to 47% by 2030, most of which would cost the shipping industry nothing. But it also said that if ship owners only adopted cost-neutral measures, emissions from shipping would be 39% higher in 2030 than they were in 2007.

The report advises against giving away free credits, recommending all should be auctioned, but says some free allocations may be necessary to create a level playing field with other means of transport.

Ships using EU ports in 2006 emitted 310 million tonnes of CO2, a higher figure than previous estimates because for the first time passenger ships were included alongside cargo ships. The total amounts to 31% of global shipping emissions, and also 6.1% of the EU’s greenhouse gases.

The World Shipping Council, which represents owners of passenger ships, is opposed to emissions trading unless it covers other transport modes. In a submission to the IMO, it said new ships should meet binding efficiency standards and existing ships should face fines if they drop below an efficiency benchmark. The CE Delft consortium rejected efficiency standards as methods of measurement are of dubious accuracy.

• Compliance with new EU rules on sulphur content of shipping fuels is proving to be very slow. Under rules introduced on 1 January, ships using EU ports cannot use fuels with a sulphur content above 0.1% while berthed, but some ships have not been modified to use low-sulphur fuels, and very few ships have been certified as being able to use them.

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