INTERTANKO in favour of EU ETS proposal to include charterers as responsible parties

INTERTANKO supported the recent proposal by MEP Peter Liese, which advocates the inclusion of charterers as responsible parties in the EU’s Emissions Trading Scheme (ETS).

MEP Peter Liese issued a draft report on the EU ETS, recommending that the commercial operator of a ship should be the final entity responsible for the payment of the EU ETS, not the shipowner.

Commenting on the development, Paolo d’Amico, chairman of INTERTANKO, said:

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

Mr d’Amico added however that the question is whether the proposed amendment would define contractual arrangements between the tanker owner and the charterer tightly enough to give reassurance in the case of charter party disputes or when changing standard industry clauses.

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In another amendment, Mr Liese proposed the establishment of an Ocean Fund through revenues generated by the EU ETS, in order to improve the energy efficiency of ships and supporting investment.

Commenting on the suggestion, Dragos Rauta, INTERTANKO’s Technical Director, noted that “there is no reason to transfer funds to other sectors, as shipping is the most environmentally friendly mode of transport and modal shift from shipping to other modes of transport should be avoided.”

In fact, INTERTANKO believes that funds collected from ships must be directed to efforts to decarbonise shipping, with clear obligations on all other stakeholders, including Member States, to provide and promote alternative fuels/solutions.

The decarbonisation of shipping is dependent on the existence of solutions (technologies and fuels) to achieve the targets. The lack of legal obligations on the ‘supply’ side to develop such solutions is a major hindrance

stated Mr Rauta.

Finally, as stated by the European Commission in its Fit for 55 proposals, a global approach to reducing greenhouse gases is preferable. INTERTANKO’s Members agree with this, both for the sake of a level playing field on an international stage and to reach the GHG emission cuts needed.

On the other hand, after the EU Parliament’s Rapporteur, MEP Peter Liese, 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.