Washington-based container shipping lobbying group, the World Shipping Council (WSC), has published a paper highlighting serious concerns for maritime trade and global efforts to reduce greenhouse gas emissions if the European Union proceeds as planned and expands its emissions trading system (ETS) to include international shipping.
The WSC paper focuses on the problems created by the geographic scope of the planned regulation.
WSC reckons the application of the EU ETS to shipping will likely mirror the scope of existing EU legislation on monitoring, reporting and verification (MRV) of carbon emissions. Bringing international shipping into the EU ETS system using the MRV scope would regulate the operation of ships on several of the world’s seas and oceans, including on the high seas and in waters adjacent to non-EU nations, WSC suggests.
“This question of the geographic scope of any ETS system for shipping must be addressed before the European Commission can turn to the many technical details that would be involved in creating such a system. If the current MRV geographic scope is used, a majority of the emissions covered by the system would occur outside EU waters, in many cases from voyages extending thousands of miles across the globe,” said WSC president and CEO John Butler.
“The cargo concerned is not just EU imports and exports; it is also the imports and exports of the EU’s trading partners. This will create trade tensions and raise legal and diplomatic concerns about the geographic reach of a unilaterally imposed emissions charge. The EU would be well advised to avoid extraterritorial application of the ETS,” Butler added.
WSC also believes that the international tensions and disruption caused by an EU ETS with extraterritorial effect would harm the prospects for a comprehensive global solution through the International Maritime Organization (IMO).
“Ironically, far from galvanising efforts in the IMO to implement global measures to curb CO2 emissions, an EU ETS is more likely to prevent a global solution. It is unlikely that a government that has set up its own revenue-generating emissions system will dismantle it in favour of a global one. The EU wants to lead the effort to decarbonize shipping, and that leadership needs to be channelled through the IMO, which is the only place where a global solution can be reached,” Butler concluded.
The WSC paper has come in for swift criticism by a host of environmental NGOs.
Faïg Abbasov, shipping programme manager at Transport & Environment, commented: “It is quite extraordinary that WSC questions the effectiveness of EU carbon pricing, which places a €25 charge on each tonne of CO2 emissions. In contrast, WSC’s own proposal to the IMO suggests it thinks that a global carbon price of €0.60 a tonne would do the trick. This paper by WSC has no scientific or legal foundation and is just a compilation of the political opinions of the container industry. The sector should instead embrace Europe’s climate ambition.”