In line with a great deal of debate across the industry, BIMCO became the latest shipping association to express concerns on the inclusion of shipping in the EU Emissions Trading Scheme (ETS), noting that such action will inhibit global action on reducing CO2 emissions.
The statement follows the approval of the shipping inclusion in EU ETS by the European Parliament earlier in September.
If the EU implements a regional ETS, shipping risks getting hit by multiple emission trading systems which will make a global ETS much more difficult to achieve,
…argues David Loosley, BIMCO Secretary General.
Instead, BIMCO urges the EU “to work with the international community at the IMO to get a global market-based measure established, when the required technology is available, which would ensure the industry operates on a level playing field.”
BIMCO based its argument on the fact that, when the EU attempted to unilaterally enforce its ETS on airlines flying in or out of EU in 2012, it was met with stiff opposition from large countries, such as China, India and the US; and this could occur also in case of an EU-imposed regional ETS for shipping.
Given the international political climate in 2020, I see it as much more likely today that the EU ETS will be met with retaliation from its international trading partners over such a move,
…stresses Loosley.
Secondly, BIMCO notes, an ECSA and ICS study on the implications of applying the EU ETS to international shipping from July 2020 revealed that the inclusion of regional flights has not led to emissions reductions for the aviation sector. In fact, emissions from flights covered by the EU ETS have risen by 26% since 2012.
Thirdly, a regional market-based measure fails to incentivise shipowners to invest in carbon-reducing technologies, according to the Council.
When you build a ship, you don’t know how often it will call at EU ports during its 25-year lifetime. That makes it impossible to calculate when an investment in carbon-reducing technology will have paid off. The consequence is that a regional ETS will not change how ships are built – it will just be a tax that ultimately ends up with the consumers,
…says Loosley.
Finally, such a measure could also negatively affect the good faith between IMO member-states, decreasing the likelihood of a global measure, which would have a much stronger effect.
On their part, the Parliament in mid-September voted in favor of this measure – with 520 votes to 94 and 77 abstentions- based on the fact that IMO has made insufficient progress in reaching a global agreement on GHG emissions and “wants maritime transport to be more ambitious”.
