Greek shipowners support EU proposal for ETS

Greek shipowners welcome European Parliament’s Report’s recognition of the commercial operators’ structural role in shipping’s decarbonisation and the need for a sector dedicated Fund.

The Union of Greek Shipowners (UGS) said that the submitted report addresses the shipping industry’s concerns to a significant extent, mainly by recognising the commercial operators’ structural role in shipping and for its decarbonisation, in line with “the polluter pays” principle as well as the need for a sector-dedicated Fund.

The report mandates the inclusion of a binding clause in contractual agreements between owners and commercial operators of their vessels and a dedicated Ocean Fund, where at least 75% of revenues from shipping’s ETS allowances will be invested for the decarbonisation of the industry.

According to UGS, this is because currently the production and availability of alternative carbon-free fuels and their related propulsion technologies are still at immature stages of development, especially for the ocean going bulk sector, while bringing these fuels and technologies to market eventually will be costly and will be primarily the endeavour of other stakeholders.

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It is unfortunate that an organisation representing mega carriers in the container liner sector exclusively has opposed the aforementioned EP proposals

the UGS stated.

The UGS also noted that it “fails to understand the argumentation, given that liner shipping companies are only partially commercial operators of chartered in tonnage and not chartering companies as is the rule in the bulk/tramp sector.”

Furthermore, these liner shipping companies can readily pass on the costs of decarbonisation, including the cost of ETS allowances to their customers, UGS said.

The UGS primarily represents bulk/tramp shipowners which is by far the largest and most efficient segment of shipping, where charterers, as a rule, are the commercial operators of the vessels, where thousands of primarily shipping SMEs compete under almost perfectly competitive conditions and where the shipping companies are price takers. It is, therefore, essential that charterers, as commercial operators of the vessels, assume responsibility in line with the “polluter pays” principle

UGS mentioned.

INTERTANKO also supported the recent proposal by MEP Peter Liese, with Paolo d’Amico, chairman of INTERTANKO, saying:

The proposed amendments to the EU ETS are a step in the right direction and support the principle that the commercial entity responsible for transportation at sea should also be responsible for meeting the obligations under the EU ETS

On the other hand, after the EU Parliament’s Rapporteur published his draft report on a proposal to revise the Emissions Trading System (ETS) Directive, the World Shipping Council (WSC) raises concerns.

More specifically, WSC has two primary concerns:

The proposed changed definition of “responsible entity” would corrupt the ETS: The proposed amendments are intended to shield shipowners from ETS costs and then provide them with front-of-line access to ETS revenues such as the Ocean Fund. This would corrupt the whole idea of the ETS, changing it from a “polluter-pays” policy to a system where the “polluter-gets-paid”, and vastly reduce its effectiveness. A market incentive for technological change that cannot be applied to shipowners who control the pace of shipboard technology innovation will fail to achieve EU Green Deal goals, slowing down the pace of transition.
The bilateral agreements proposed would undermine progress towards global GHG policy: Other amendments direct the European Commission to abandon its principle of multilateralism and engage in bilateral deals with nations to extend carbon pricing only for routes serving Europe. This would be a costly distraction, undermining progress towards global GHG policy at the IMO and slowing progress toward decarbonising shipping. It would also undermine the GHG and economic goals of the EU Green Deal, amplifying the risks identified in EU impact assessments – GHG leakage, loss of EU port competitiveness, and distortion of trade.