Industry indecision makes EU action on ship CO2 likely

March 06, 2012
The EU will get to grips with shipping emissions

The International Maritime Organization (IMO) could soon find itself in the same predicament as its aviation counterpart in trying to fend-off European Union regulation on greenhouse gas emissions.

Aviation is responsible for 40 percent of the value of internationally traded freight but 90 percent of the world’s traded goods are transported by ocean-going vessels - making the trade implications of an EU move far wider.

Although the IMO has plans to ramp up the energy efficiency of new builds in five-year phases from 2015, it's 170 members have been struggling for years to agree upon market-based measures to curb emissions from the global mercantile fleet. Following yet another meeting last week at which there was a lack of tangible progress on the issue - and with the next major IMO meeting not scheduled until October - it is unclear when such measures will be agreed.

The European Commission, meanwhile, has announced that it will take measures into its own hands if the UN agency is unable to implement an effective strategy. With international shipping responsible for more than three percent of greenhouse gas production, the EU sees the sector as an important area to be addressed in order to reach its GHG reduction goals.

Under existing legislation the EU was obliged to take action if no international agreement to deal with maritime emissions was in place by the end of 2011 to help meet its own target of a 20 per cent emissions cut across all sectors by 2020. EC officials maintain, however, that they would still prefer an international solution if possible.

“While we have a clear preference for global action on measures to reduce emissions from shipping, we don’t see the IMO on track to deliver reductions consistent with the globally accepted maximum two degrees Celsius objective,” a Commission spokesman told Reuters.

The European Commission is currently undertaking a public consultation on possible measures for curbing maritime emissions, including a compensation fund, an emissions trading system, a fuel or carbon tax, and a mandatory emission reduction per ship. Based on this, the Commission says it will conduct an impact assessment between April and June, with a final proposal to be released before the end of the year.

Aviation comparison

As the EC moves through process this year, many are watching for similarities between its treatment of the maritime and aviation sectors. The inclusion of aviation under the EU's Emissions Trading System (ETS), has already triggered much criticism from trading partners - including the US, China, and Russia - and has led many to consider implementing countermeasures.

The Commission originally wanted the UN’s International Civil Aviation Organization (ICAO) be the body responsible for regulating aviation emissions but lost patience with the UN body’s slow progress. History appears to be repeating itself with shipping.

There are, however, some significant differences between the two sectors, as the shipping community is quick to point out. As an industry it is more diverse and does not carry the same baggage of being a national emblem as so many airlines do.

It should also be kept in mind that the EU already has a track record of getting the shipping lines to do its bidding. In 2008 it did much to dismantle the long-established cartels, knows as liner shipping conferences, which had been a feature of the maritime industry for many decades, by forbidding conference members access to European ports.

Other priorities

Making progress on market-based measures in the IMO forum has been complicated by Round Table of International Shipping Associations, which says it would like to see the issue postponed until the mandatory energy efficiency design standards are implemented.