European shipowners say charterers must pay as shipping nears entry into regional emission trading scheme
The European Community Shipowners’ Associations (ECSA) has delivered a policy paper on the European Union’s proposal to include shipping into its emission trading scheme (ETS), and, unsurprisingly, owners are saying charterers ought to pay for the carbon costs.
The policy paper suggests that since charterers are the ones who make the decisions that dictate the volume of CO2 emissions, they ought to be paying for the ETS.
“This entity would be the entity that is ultimately responsible for the purchase of the fuel and the choice of route and speed of the ship,” the ECSA position paper states.
“Applying the polluter pays principle to shipping is critical for taking further efficiency measures and for the uptake of clean fuels in the sector. ECSA supports that the commercial operator should bear the costs of the EU ETS. The law should require the entity responsible for the decisions affecting the CO2 emissions of a ship to bear the costs arising from the implementation of the EU ETS in the context of a contractual agreement,” said Sotiris Raptis, ECSA’s acting secretary general.
Applying the polluter pays principle to shipping is critical for taking further efficiency measures and for the uptake of clean fuels in the sector
European shipowners have proposed the introduction of a legally binding requirement in the articles of the EU ETS proposal. Such a requirement should provide for passing through the costs of the system from the shipping companies to the commercial operators in the context of a contractual agreement.
European shipowners have also called for a dedicated fund to be set up under the EU ETS to stabilise carbon prices. In addition, any revenues generated under the EU ETS should be used to financially support R&D projects and should contribute to lowering the price differential between cleaner and conventional fuels.
“Even though our first preference always is an international regulation for shipping at IMO level, the sector should contribute its fair share to address the climate crisis at EU level as well. ECSA advocates for a dedicated fund to be set up under the EU ETS to stabilise the carbon price, which is especially important for the many shipping SMEs. Importantly, generated revenues should support the uptake of clean fuels” said Claes Berglund, ECSA’s president.
