Shipping Australia calls for global rules on maritime environment policy

Shipping Australia, a group which represents shipowners in Australia, has called for a “global maritime environment policy” to be set at the IMO this week, with globally unified rules.

Top of the Agenda is the likely adoption of a revised greenhouse gas strategy for the International Maritime Organization. Currently, the goal is for a minimum 50% cut in greenhouse gas emissions by 2050 (2008 base year), while also working toward a complete phase-out of climate changing gases by the end of this century. This ambition has been called by many countries and shipping groups to be remarkably modest at best, and to cater far too much to the desires of the more conservative sector in the shipping world. It is also in conflict with the Paris 2015 agreement.

However for some time there has been work carried out on a revision of that strategy. The MEPC this year is expected to adopt the revised strategy.

The IMO has said that “the revised IMO GHG Strategy will contain concrete greenhouse gas reduction targets for the sector and is expected to outline a basket of technical and economic measures to be developed to set global shipping on an ambitious path towards phasing out greenhouse gas emissions”.

Shipping Australia said that it looked forward to seeing the outcome.

One proposal (by Norway) is a cap and trade system whereby some kind of emissions credit would be auctioned. This would affect, if implemented on the 2019 fleet, about 63,500 ships at or above 400 gt. The IMO noted that such a scheme would generate “considerable revenues” – in the range of $130bn to $140bn per year from 2030. Norway wants to use the funds to support climate action in developing countries and to accelerate the introduction of sustainable low- and zero-emissions fuels and technologies, in particular, green fuels and infrastructure capacity.

Japan has proposed a “feebate” mechanism to help phase out greenhouse gas emissions by 2050. Under this proposal, a mandatory fund, managed by the IMO, would be set up and ships would have to make mandatory financial contributions. The fund would then disburse rewards to stimulate demand for zero-emission fuels and technologies, to support projects in developing countries, to develop infrastructure for green fuel, and for research and development. Japa’s proposal is a goal-based measure and would accept any approach, including onboard carbon capture and storage. Shipping Australia said that this was “attractive for a number of reasons as, like the Norwegian proposal, it is a market-based measure and it would well-align with existing carbon intensity and ship index rules set (along with the associated data collection and processing systems) set-up by the IMO”.

A Marshall Islands and Solomon Islands-led pacific islands proposal would consist of an imposition of a global greenhouse gas levy at the point of sale on bunker fuel. Shipping Australia said that this was “another attractive measure, owing to its relative simplicity, it’s ability to send a clear, strong, signal, and the likely impacts it would have on demand”, adding that “the revenues could then be spent on research, development, and maritime projects”. It is considered that this levy would be consistent with other international treaties such as the Paris Agreement.

Shipping Australia said that the global shipping could support an international tax or levy, provided that it was authorized by the IMO and it operated on a global basis.

Shipping Australia said that the industry was “absolutely opposed to each separate country or regions making their own rules”. It noted that there were about 190 countries in the world “and ships simply cannot carry international trade if they have to comply with many different sets of contradictory rules”.

The organisation said that it was also of the view that any funds raised must be used to prevent and alleviate climate change e.g. technology-research; that any climate-related taxes or levies should have an end-point and not become an endless tax grab; and that any levies or taxes should be clear and separate from any other fees.