ICS: EU Decision to Revise EU ETS Demonstrates Faith in IMO

The recent decision by the European Union not to include shipping within the full scope of the regional EU Emissions Trading System (EU ETS) has shown faith in UN International Maritime Organization (IMO) to further reduce shipping’s carbon emissions, the International Chamber of Shipping (ICS) said. 

“We think that this demonstrates confidence within the EU institutions in the current progress being made at the UN IMO to develop an ambitious strategy that will deliver additional CO2 reduction measures, consistent with the shipping industry’s own vision of zero emissions, as soon as possible,” Simon Bennett,  ICS Director of Policy, commented, speaking from the UN Climate Change Conference in Bonn.

On November 9, the European Parliament and Council reached a provisional agreement to revise the EU ETS for the period after 2020. The EU governments and MEPs agreed that Europe should act on shipping emissions from 2023 if the IMO fails to deliver effective global measures.

“We understand that the date which the EU has agreed for when the European Commission will next closely examine the progress that has been made globally is consistent with those time lines agreed by all IMO Member States,” Bennett added.

ICS believes the decision also shows a welcome recognition within the EU, including the European Commission, that ETS, is an inappropriate tool for application to an industry like shipping. As explained, this is because of the huge risk of creating serious market distortions and the administrative challenge of incorporating tens of thousands of ships operated by thousands of SMEs into a discredited system which the EU is already struggling to reform.

“The industry does not support the concept of Market Based Measures (MBM). But in the event that, as part of the IMO strategy, MBMs are included as a possible candidate measure, today’s EU decision does at least make it more likely that the type of MBM that might be explored would be a global fuel levy,” Bennett added.

“And compared to the nightmare of a regional ETS, a global fuel levy would clearly be the preference of the vast majority of shipowners should an MBM ever be imposed on them,” he concluded.