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GHG Emissions from ships

European Legislation compels the EU to take action to help meet its own target of a 20 per cent emissions cut across all sectors by 2020, if no international agreement to deal with maritime emissions was in place by the end of 2011. Between January and April 2012, the European Commission conducted an on-line public consultation on the possible measures to reduce GHG emissions from ships. This consultation concentrated on Market Based Measures (MBMs) and presented four options notably:

-A compensation fund;
-An Emissions Trading Scheme (ETS);
-A tax on fuel or on emissions;
-A mandatory emission reduction per ship.

It should be noted that the questions brought forward in the questionnaire started from the assumption that the EU should have a regional regime on CO2 Market Based Measures for maritime transport.

Various shipping industry organisations responded to the questionnaire and they invariably pointed out that the contribution of shipping should not be regional e.g. by contributing to the European emission reduction scheme, but rather to a global scheme developed by and administered through the IMO.

Following the conclusion of an Impact Assessment, an EU Commission proposal on a European Market Based Measure was expected by the end of 2012.

However, economic realities, very strong opposition to the inclusion of aviation in the European Emissions Trading Scheme (ETS), and the shambles of the latter outcome, must have played a part in the EU's decision to announce instead in December 2012 its commitment to seek global agreement for a MBM at IMO. Furthermore, as an 'interim measure', it proposed the development of a Monitoring, Reporting and Verification system (MRV) of CO2 emissions, as a contribution towards finding the most appropriate global solution for CO2 monitoring from international shipping. As expected, the usual concern reappeared, in that it would be preferable for the MRV to be developed at IMO for global application, but the EU is simultaneously developing a regional approach, in the event that an IMO agreement on MRV cannot be achieved.

To this effect, a pertinent legislative proposal from DG CLIMA is expected, which will be accompanied by a Communication on an EU strategy to take action on maritime GHG emissions, as well as the outcome of a Commission's Impact Assessment on the MRV system and five market-based measures.

The key points of the proposed legislation are:

- The primary objectives of the MRV system are to remove market barriers and to reinforce the green image of the shipping sector.
- The general purpose is to speed up and help the IMO process by giving further clarity on the environmental performance/energy efficiency of ships.
- The more specific purpose of the EU MRV is to collect reliable/comparable data, in order to allow appropriate decisions on the next steps to be taken (MBM, Energy Efficiency measures, others).
- The MRV process is limited to CO2 emissions (no other GHG or pollutants), along with transportation related information gathering (distance travelled and cargo carried).
- The data will be monitored according to a monitoring plan on a per voyage basis. There should be flexibility in the monitoring methodologies.
- The collected information should be aggregated and reported on an annual basis to an EU central body/Flag States, and made publicly available. The publication is expected to provide an incentive for owners to increase energy efficiency.
- Verification should be done by an accredited independent verifier.
- Enforcement to be performed through Flag State and Port State control rules.
- Final adoption by the Commission is expected latest by July 2013.

The GSCC's position, as put forward in various papers, correspondence and talks with EU Commissioners, MEPs and others is that it is against a regional measure, but if an MBM were to be adopted, either by the EU or globally, through IMO, a simple levy on fuel consumed would be preferable to other forms of MBM. In particular, the GSCC has repeatedly stated its opposition to any form of emissions trading (ETS) as it considers such a scheme to be unsuitable to the shipping industry. Similarly, the GSCC believes the MRV system should be developed at IMO, and must be global, simple and based on fuel consumption and bunker delivery notes. There is no merit in a regional European MRV.