ICS, ESPO against Inclusion of Shipping in EU ETS

After the European Parliament voted to include CO2 emissions from shipping in the EU Emission Trading Scheme (ETS), the International Chamber of Shipping (ICS) and the European Sea Ports Organisation (ESPO) voiced their opposition to the move.   

Along with the inclusion of shipping in the ETS, the parliament also voted in favor of the establishment of a maritime climate fund “in the absence of progress at international level” as from 2023.

As explained, the proposal will see shipowners buy ETS allowances from 2023 onwards or pay an equivalent amount into the new maritime climate fund. The fund would minimize administrative burden by buying allowances on the sector’s behalf and reinvesting the revenues to make ships and ports cleaner and more efficient.

ESPO said that the International Maritime Organization (IMO) is “by far the right place to introduce CO2 target and measures to reduce emissions from shipping in line with the Paris Agreement”, with climate change being a global challenge and shipping a global industry.

In that respect, ESPO believes that the roadmap agreed at the IMO MEPC meeting last October, is a starting point for the discussions. On the basis of available scientific evidence, the IMO needs to strengthen its efforts and submit an initial reduction target to the stock-take process of the Paris Agreement in 2018 accompanied by short-term measures. By 2023, IMO should introduce the necessary target and measures to bend down the CO2 emissions curve, according to ESPO.

ESPO thinks that a 6-year period until EU measures are put in place is sufficient time for the IMO to discuss and agree on the necessary target and measures. 2023 should be seen as a milestone. In case this deadline is not met, EU measures will have to be introduced.

“It should, however, be clear that the EU measures will be repealed in case of an international agreement by 2023,” ESPO further adds.

“We … hope that the IMO will speed up the process and demonstrate the same level of ambition when addressing climate change as it did on the global air pollution cap agreed last October,” Isabelle Ryckbost, ESPO’s Secretary General, said.

Furthermore, the ICS, which represents over 80% of the world merchant fleet, said it is “disappointed but not surprised” by the vote to propose that international shipping (including non-EU flagged ships) should be incorporated into the ETS.

“This vote for a unilateral, regional measure simply risks polarising debate among IMO Member States which have already agreed to develop a strategy for reducing shipping’s CO₂ emissions in line with the goals of the Paris Agreement on Climate Change,” Simon Bennett, ICS Director of Policy & External Relations, explained.

“The vote completely ignores the real progress that has already been made by IMO – which under the Kyoto Protocol, to which EU Member States are signatory, has a mandate to address CO₂ emissions from international shipping,” Bennett added.

In 2011, the IMO adopted technical regulations which will ensure that all ships built in 8-year period will be at least 30% more CO₂ efficient than most of the fleet operating today, and the global shipping sector has already dramatically reduced its total CO₂ emissions despite an increase in global trade.

In the words of Bennett “EU Member States, which are also members of IMO, now have a duty to reject these unhelpful proposals, as they are taken forward as part of the wholesale attempt to reform the EU Emissions Trading System. Trying to include thousands of small shipping companies – including thousands of companies not based in the EU – into a system designed for major EU power generating companies and steel and cement producers is only going to complicate this reform.”

“As we saw when the EU unsuccessfully tried to impose the ETS on international aviation, non-EU governments are not going to take kindly to being told that ships flying their flag, when visiting EU ports, may have to pay money into EU schemes designed to help subsidise the closure of European coal mines,” Bennett observed.

ICS says it is working closely with the European Community Shipowners’ Associations (ECSA) in order to persuade the EU Member States and the European Commission to reject these proposals, in view of their support for a global solution at IMO.

Earlier this week, ECSA also argued that shipping does not belong in the EU ETS.

On the other hand, Transport & Environment (T&E) association argued that by including shipping in the ETS, this sector will start contributing to the EU’s emissions reduction targets for the first time.

“This crossparty proposal will end the anomaly of shipping being the only sector in Europe not contributing to the 2030 emissions reduction target. EU governments must follow Parliament’s lead and agree that ship CO2 emissions must go in the EU ETS if the IMO does not act. The benefits to our climate through less warming and to our industry and economy through lower fuel costs cannot be ignored,” Bill Hemmings, Aviation and Shipping Policy Director at T&E, pointed out.