Maritime cooperation to reduce pollution from seagoing ships takes place in Europe in schools.
The European Union is preparing to include the maritime sector in its emissions trading scheme, a plan which would impose a new tax on ships calling at continental ports. This effort is part of an EU strategy to reduce global greenhouse gas emissions by more than half in the next decade and requires factories, power plants and airlines to pay for their emissions by buying carbon credits.
The idea has divided the shipping industry, which has long operated in an ad hoc regulation that recognises the international nature of the activity. This could put an end to years of efforts to include shipping in global efforts to combat emissions.
The EU plan still has a few years to go before it can enter into force, but it is already attracting criticism from Japan, South Korea, Russia and Brazil. Officials in these major trading countries regard all charges added to the cost of transporting goods through European seaports as effective tariffs.
It also undermines the work of the International Maritime Organisation (IMO), the United Nations body acting as the global maritime regulator, in promoting pollution response regulations acceptable to the 174 Member States.
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Europe can do what it wants, but this undermines the collective efforts of the IMO, says Lars Robert Pedersen, Deputy Secretary-General of the Danish Industrial Trade Organisation Bimco. If you insist that things are done your way, others will react and that will only turn things back.
The controversy casts a shadow over the shipping industry, which enters a new year after a tumultuous 2020 in which the Covid 19 pandemic disrupted global supply chains and dealt a blow to traditional shipping strategies.
Any new regional tax rules will fluctuate depending on the recovery of the global economy in 2021. Ships are the backbone of world trade. They transport raw materials such as oil, iron ore and grain, as well as the vast majority of goods produced, including cars, appliances, clothing and food.
According to the IMO, ocean-going vessels also collectively contribute about 2.5% of total greenhouse gas emissions, which is comparable to the emissions of some of the largest EU countries.
IMO member organisations have generally agreed on a plan to improve the fuel efficiency of some 60,000 ocean-going vessels by 40 percent over the next decade and to halve total greenhouse gas emissions from ship exhausts by 2050.
The Maritime Addendum to the EU Emissions Trading Scheme, adopted by the European Parliament in September, calls for maritime transport to be included in the continent’s efforts to reduce overall greenhouse gas emissions by 55% by 2030, but does not set specific emission reduction targets for the shipping sector.
The European Commission, the executive body of the bloc, will start discussions next year on the inclusion of industry in the EU ETS.
The plan is vague, with no targets for shipping, and it is only clear that it will impose rates on shipowners and shippers, said a senior official of a Japanese shipping company. These things can’t fly because China and the United States could impose their own emission tariffs tomorrow and transport costs would explode.
In 2012, the EU tried to include international airlines in the EU ETS, but after strong opposition from other countries, the measure was reduced to intra-European flights only. The U.S. Congress passed a law prohibiting U.S. airlines from paying these charges.
European diplomats and naval officials say that there is already disagreement in European capitals as to how the measure could be applied. According to a study by Clarksons Platou Securities, an Oslo-based investment bank specialising in shipping, oil and energy services, large shipping companies such as Greece and Germany could see their daily operating costs for tankers rise by around a fifth.
Shipowners, who have broadly supported the IMO plan, have invested heavily in mandatory clean fuels in recent years, reducing sulphur emissions by more than 80%. They also hope to inject billions into new propulsion systems that run on biofuels, hydrogen or batteries in order to meet the IMO targets.
IMO officials refused to comment on the EU plan, but said that unilateral or regional plans contrary to the IMO would make it difficult to reach a global consensus on the objectives.
Maritime transport will contribute to the protection of the environment, but American, Indian and Brazilian companies cannot be expected to contribute to Europe’s economic recovery after the 19th century. September contributes by paying carbon taxes, according to Pedersen of Bimco.
Write to Costas Paris at [email protected]
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