A global carbon trading mechanism or a system of additional fuel levies would provide a more effective means of curbing greenhouse gas emissions from shipping than incorporating the industry into the EU Emissions Trading Scheme (ETS).
That is the view of UK trade body the Chamber of Shipping, which released new ‘manuals’ yesterday outlining how both market-based policies could work.
The move came just days after the group publicly dismissed the EU’s plans to pull the international shipping industry into its emissions trading scheme.
The international shipping industry’s agreement last month to mandatory fuel efficiency standards for new ships has not stopped the EU pursuing its 2005 proposal to include shipping in the ETS from 2013 - an idea that has gained traction with politicians and green groups keen to curb the shipping sector’s growing carbon footprint.
Over 1.1 billion tonnes of carbon are emitted each year by ships, around three per cent of the global total and greater than all but four countries - China, the US, India and Russia. With an anticipated long-term increase in global trade, the sector’s emissions are expected to double over the coming decades if no action is taken to curb emissions.
Shipping is in a similar situation to the aviation industry, which is to see all flights in and out of the EU included in the ETS from the beginning of next year, assuming that the ongoing legal action from US airlines challenging the decision is resolved and the EU can face down similar complaints from airlines in China, Russia and a number other countries.
As with their aviation counterparts, shipping companies would prefer any deal on tackling emissions to be global, warning that piecemeal regulations could result in vessels simply refuelling at ports outside Europe.
Under the Chamber of Shipping’s proposed trading system, companies would be required to buy and then surrender carbon credits in proportion to their bunker fuel purchases.
The proposed scheme is broadly similar to the EU proposals, but David Balston, director of safety and environment at the Chamber of Shipping, told BusinessGreen that implementing a global scheme would counter any ‘carbon leakage’ and incentivise all shipping firms to curb emissions without strangling the industry’s growth in Europe.
Alternatively, the Chamber argued that a worldwide levy on bunker fuel would provide a simpler means of incentivising firms to enhance fuel efficiency where tax receipts from the new levy could be used to fund emissions reductions and climate change mitigation and adaptation schemes in developing countries.
The briefing paper proposed that both schemes could be implemented “relatively quickly and easily”, a statement that flies in the face of the slow progress on tackling emissions in negotiations at the International Maritime Organisation (IMO).
However, while Balston admitted that it would “probably take a long time to get a meaningful debate of market-based measures” underway at the UN agency, he insisted that this does not mean the EU’s proposals provide a good alternative.
“The EU ETS does not fit a truly global industry such as shipping,” he said. “How long [a global system] would take I don’t know, but as long as the EU ETS is in place, shipping trade will be skewed against Europe.”
The EU argues that including shipping in the ETS would set an example for other regions to follow, and that the move provides the most effective means currently available for tackling shipping’s ballooning emissions.
A spokesman for campaign group Transport & Environment said that, while the IMO had made progress on cutting emissions, the EU’s stance is fully justified.
“It would be great to have a global agreement. Everyone thinks that,” he told BusinessGreen. “But in the meantime, it must be possible to do something in Europe.”
Technical solutions to the problem have also been mooted, with solar-powered ships or even the return of sailing ships proposed by some operators.
David Symons, director at environmental consultancy WSP Environment & Energy, maintained that such innovations are not so far-fetched.
“Slowing down is the simplest way to reduce shipping emissions, and we could even see the return of the sail,” he said.
“Using complete sail ships again is probably unrealistic, but a combination of sail and fuel could help reduce emissions by up to 35 per cent, making a serious dent in global carbon emissions.”
