A decision by the European Parliament’s Environment Committee to call for the inclusion of maritime transport into the EU Emissions Trading Scheme (ETS) – which was a recommendation directly opposite to one made by the Parliament’s Industry Committee last month — has been heavily criticized by shipping industry groups.
The Environment Committee said that shipping should be included in the EU ETS by 2023 if no global agreement is operating under the IMO from 2021.
ETS, set up in 2005, puts a limit on overall emissions from covered installations, reducing the limit each year. Companies can buy and sell emission allowances within that limit.
In 2015 the EU published a legislative proposal to enhance cost-effective emission reductions and low-carbon investments. Part of the revenues generated from ETS would be channelled through a Maritime Climate Fund to improve energy efficiency and to invest in technologies for ports and short sea shipping. However, because shipping is a global and mobile industry, the European Commission decided not to include shipping in ETS.
At the IMO a mandatory data collection system and a deadline for a maritime CO2 strategy was adopted in October 2016, with the adoption of an initial strategy in 2018 and an implementation plan in 2023.
The Danish Shipowners’ Association said that the Environment Committee had chosen regionalism over global progress. “By calling for an ETS for shipping in case no international system operates by 2021, my colleagues have unfortunately chosen to cave in to regionalism and ignore the long-term impact for European growth and the environment,” said Industry Committee Member Bendt Bendtsen. He noted that only a small part of global shipping called at EU ports, and that ETS now ran the risk of derailing the IMO process. “I can only say that the Industry Committee stands firmly behind its call for shipping to be addressed internationally, otherwise it may well lead to cargo being transshipped outside of Europe with direct impacts on European employment,” he said. Danish shipowners have already agreed to reduce emissions in line with the rest of the world in order to reach the goals of the Paris Agreement. Shipping needs to become CO2 neutral by 2050.
The International Chamber of Shipping (ICS) said that the decision would impede ongoing discussions on additional CO2 reduction measures at the IMO. ICS Director of Policy and External Relations, Simon Bennett, said that “non-EU nations will be disappointed and very concerned by yesterday’s vote in the European Parliament Environment Committee following IMO’s adoption just a few weeks ago of a comprehensive road map for action”, adding, “but we hope that EU governments and the European Commission will see sense and recognize that threats to their trading partners will not serve the development of the global solution which both they and the shipping industry want and need.”
ICS has said that emissions trading, which was developed mainly for industries such as power generation and cement & steel production, was “completely inappropriate” for international shipping, which is mainly made up of smaller companies, typically operating fewer than 10 ships. Bennett said that “the EU ETS has been an abject failure. Its unilateral application to global shipping would create market distortion while generating trade disputes with China and other Asian nations, as happened when the EU tried unsuccessfully to impose its ETS on international aviation”.
ICS is also working closely with the European Community Shipowners’ Associations (ECSA) to persuade the plenary of the European Parliament, as well as EU Member States and the European Commission, to reject the European Parliament Environment Committee’s report, which is expected to be voted on in early 2017. ECSA Secretary General Patrick Verhoeven said that “the report ignores and undermines the roadmap that was agreed at IMO end of October. We find this very
disappointing, but it does not change our resolve to make the IMO roadmap a success.”
The European Sea Ports Organisation (ESPO) said that six years (to 2023) gives the IMO enough time to put forward an emissions reduction target and measures to implement it. “The IMO is the right place to address shipping emissions,” according to ESPO Secretary-General Isabelle Ryckbost.