Shipowners welcome EU decision to not put shipping in ETS, but lobby groups point to pressure clause

A decision from Europe to move away from bringing shipping into its regional emission’s trading scheme has been welcomed by shipping groups.

A provisional decision by the EU not to include shipping in the next phase of the European is being seen as further support for the ongoing progress at the IMO to find globally acceptable measures to curb shipping’ contribution to anthropocentric greenhouse gas emissions.

The next (fourth) phase of the European ETS, which will run from 2021 to 2030 to has been under review for over two years. 

Under the review period in the European Parliament’s environment committee there had been a proposal submitted that shipping should be included, and that any vessel owners can opt out providing they pay into a potential mitigation fund for advancing the development and deployment of clean tech in the industry.

“We think that this demonstrates confidence within the EU institutions in the current progress being made at the IMO to develop an ambitious strategy that will deliver additional CO2 reduction measures, consistent with the shipping industry’s own vision of zero emissions, as soon as possible.” said Simon Bennett, director of policy at the International  Chamber of Shipping in a press statement.

Bennett is currently in Bonn where the latest annual climate change meeting is taking place. Discussions at the UNFCCC revolve around the voluntary contributions of signatory countries to the Paris Agreement and how they should be strengthened given scientific experts believe they are not significant to meet the agreed targets in the Agreement.

Simon Bennett: “The industry does not support the concept of Market Based Measures”.

With demands for increased efforts from UN member states there is the continued risk that countries and regions such as the European Union may use shipping to enhance their position.

The announcement that Brussels will not immediately include shipping in the next ETS phase is therefore a positive sign for shipowner groups that prefer to lobby at the IMO, despite the continued differences at the IMO over the levels of ambition.

“The industry does not support the concept of Market Based Measures” said Bennett in a press statement. But in the event that, as part of the IMO strategy, MBMs are included as a possible candidate measure, today’s EU decision does at least make it more likely that the type of MBM that might be explored would be a global fuel levy. And compared to the nightmare of a regional ETS, a global fuel levy would clearly be the preference of the vast majority of shipowners should an MBM ever be imposed on them”.

However the EU lobby-group Transport and Environment believe shipowners’ response could be premature.

There is still pressure from Brussels says Faig Abbasov, head of Shipping at T&E as the final text says that if the IMO fails to deliver strong measures by 2023, work will begin to bring shipping into the ETS.

The relevant part of the final text that lobby groups believe still puts pressure on the IMO and shipping, and suggests ETS inclusion reads:

 Under the Paris Agreement, the EU and its Member States have undertaken an economy-wide reduction target. Efforts to limit international maritime emissions through the International Maritime Organisation (IMO) are under way and should be encouraged. The IMO has set up a process to adopt in 2018 an initial emission reduction strategy to reduce greenhouse gas emissions from international shipping. The adoption of an ambitious emission reduction objective as part of this initial strategy has become a matter of urgency and is important for ensuring that international shipping contributes its fair share to the efforts needed to achieve the well below 2°C objective agreed under the Paris Agreement.

The Commission should keep under regular review, and should report at least once a year to the European Parliament and the Council on the progress achieved by the IMO towards an ambitious emission reduction objective and accompanying measures to ensure that the sector duly contributes to the efforts needed to achieve the objectives agreed under the Paris Agreement. Action from the IMO or the EU should start from 2023 including preparatory work on the adoption and the implementation and due consultation by all stakeholders.

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