Durban COP17 – difficulties of including international shipping

The European Court of Justice will soon rule on including aviation emissions, but not those of shipping, in the EU ETS.  International shipping produces 3 – 4% of global CO2. But  But it seems the EU would be unable to enforce restrictions on ships flying flags of convenience from outside the European bloc. A recent report by WWF and Oxfam shows how international shipping could be charged in a fair way, in a global system, for their carbon emissions without unduly harming poorer nations.


September 2011 report by WWF and Oxfam entitled:

“Out of the bunker

International shipping is a major – and rapidly growing – source of greenhouse gas emissions. Agreement to apply a carbon price to shipping can both reduce emissions and raise funds for climate change adaptation and mitigation in developing countries. This paper shows that doing so is possible while ensuring developing countries face no net costs. COP17 in Durban, South Africa at the end of 2011 provides an opportunity to agree the key principles of such a deal.

“This paper shows that setting a carbon price for ships, at around $25 per tonne, can drive significant maritime emissions cuts. That is likely to increase the cost of shipping by just 0.2 per cent, or $2 for every $1000 traded, but would raise $25bn per year. That money should be used to ensure that developing countries face no net costs as a result – since developed countries must lead the fight against climate change – and to provide major new resources for the GCF.”

“Shipping emissions – or ‘bunkers’ in the jargon of the UN climate negotiations are large and growing fast. A single ship can emit more in one year than many small island states. Yet they are not currently regulated under the global climate regime.”

“International shipping is already responsible for around 3 per cent of global emissions, equivalent to those of Germany. These emissions are projected to increase by 150–250 per cent by 2050 but are as yet unregulated. Tough action on emissions from ships will mark a major step towards closing the emissions gap.”

Guiding principles for a fair global deal on shipping emissions

Efforts to control rapidly rising emissions from ships have been caught for over a decade between the rock of the International Maritime Organization (IMO).

Developed countries argue that all ships must be covered by the same regulation, the norm in the IMO. Most developing countries insist that any regulation respects the principle that developed countries must lead the fight against climate change, known in the UNFCCC as ‘common but differentiated responsibilities’ (CBDR). and the hard place of the UN Framework Convention on Climate Change (UNFCCC).
Only a global approach that does not unfairly impact on developing countries can break this impasse. In 2011 governments must agree three core principles of such a scheme.
1. Meaningful emissions reductions
A carbon price should be set for emissions from all ships to ensure emissions cuts from that sector that are in line with the goal of keeping global warming below 1.5°C.
2. No net costs for developing countries
Because shipping emissions cannot practically be attributed to individual countries, a carbon price for ships must be universal. But to ensure that it is fully consistent with the CBDR principle, such a scheme must guarantee that there are no net costs for developing countries. Part of the revenues generated should therefore be used to provide rebates to developing countries to compensate for the impacts on their economies.
3. Substantial revenues for the Green Climate Fund
The major share of remaining revenues should be directed to the Green Climate Fund as a continuous source of new and reliable revenues for adaptation and mitigation efforts in developing countries.


COP17: Europe to act now on emissions

6th December 2011  (Sustainable Shipping)

The European Court of Justice is expected to give its final decision this month on a rule to include aviation emissions in the European Union Emissions Trading Scheme (EU ETS).

If given the go ahead, the rule could have great implications for the maritime industry.

While the ruling was originally expected early next year, this week during the United Nations climate conference in Durban, an EU official told Reuters the ruling will be made on December 21.

The EU ETS is a programme aimed at reducing CO2 emissions by trading and selling emissions permits on a free market. Each year, polluters have to surrender a number of permits equivalent to the amount of carbon dioxide (CO2) they emitted the preceding year. If they don’t have enough allowances, they can buy them from other companies.

Aviation emissions will be capped for the year 2012 at 97% of the sector’s emissions over the period 2004-2006 (212 million tonnes of CO2). Between 2013 and 2020, the cap will be set at 95% of aviation’s 2004-6 emissions.


[The remainder is about shipping, rather than aviation]

A report published by the European Commission’s Joint Research Centre (JRC), however, has warned that EU countries would be unable to enforce restrictions on ships flying flags of convenience from outside the European bloc.

The report has to be taken into account that trading and other transaction costs could place a large burden on small emitters such as single ships, making trading inefficient. It added that another threat to the functioning of the EU ETS is that of incomplete information or insecurity about future policy decisions, which can lead to volatility and investment risk in the carbon market.

Although maritime transport has the lowest ratio of CO2 emissions per tonne-kilometre transported compared to other modes of transport, its greenhouse gas (GHG) emissions are expected to increase from the current level of around one giga-tonne per year, by an estimated 150-200% over the next four decades.

“There is currently no strong legal basis for the EU to exercise extra-territorial jurisdiction, and this is likely to give non-EU states and industry bodies grounds for challenging carbon emissions reduction measures adopted by the EU for maritime transport,” the report stated.

However, earlier this year, a landmark mandatory agreement to reduce GHG emissions from international shipping was adopted by the Parties to Annex VI of the MARPOL Convention.

The adoption by IMO of amendments to MARPOL Annex VI on inclusion of mandatory energy efficiency regulations for ships represents the first ever global and legally binding CO2 reduction regime for an international industry sector or transport mode. This move has reduced the pressure from the EU on the shipping sector.

Natalie Bruckner-Menchelli, Vancouver News Desk, 6th December 2011


see also article from 2010

Have the EU’s shipping emissions proposals capsized?

EU report warns legal difficulties may torpedo plans to bring shipping emissions into its carbon trading scheme

By Will Nichols

23 Dec 2010 (Business Green)

Any attempt to bring shipping into the EU’s Emissions Trading Scheme (EU ETS) may be open to legal challenges, according to new research by the European Commission.

Maritime transport produces about four per cent of global man-made CO2 emissions, but there are currently no regulations in place to curb the sector’s growing carbon footprint.

Sluggish progress towards an international agreement, which the maritime sector insists is the best way to curb emissions, prompted the EU to declare it would include the sector’s emissions in the EU ETS from 2013 if an international deal is not agreed by the end of next year.

But a report published this week by the European Commission’s Joint Research Centre (JRC) appeared to torpedo the EU’s plans, warning that EU countries would be unable to enforce restrictions on ships flying flags of convenience from outside the bloc.

Moreover, international shipping law affirms that “states shall not discriminate in form or in fact against vessels of any other state”, which means nations attempting to prevent non-compliant ships from docking or passing through territorial waters could face legal action.

“There is currently no strong legal basis for the EU to exercise extra-territorial jurisdiction, and this is likely to give non-EU states and industry bodies grounds for challenging carbon emissions reduction measures adopted by the EU for maritime transport,” the report concludes.

It goes on to analyse the best methods of estimating emissions from shipping and sets out a range of alternative policy options for reducing the level of emissions from the sector.

Shipping has the lowest ratio of CO2 emissions per ton of any transport option, but its total greenhouse gas (GHG) output is expected to shoot up by an estimated 150 to 200 per cent over the next four decades as global trade increases. The industry’s sulphur dioxide emissions are also forecast to rise 10-20 per cent over the next two years alone.

The report says that the voluntary technical measures so far agreed by international maritime bodies to improve fuel efficiency and ship design are not enough to reduce emissions and must be supplemented with market-based mechanisms.

While it notes that the EU ETS provides a “definite window of opportunity, without placing an unnecessarily heavy burden on the sector”, a lack of agreement over allowance allocation and the mobile nature and diversity of craft in the sector makes inclusion in the scheme very difficult, regardless of the legal implications.

Research, Innovation and Science commissioner Máire Geoghegan-Quinn said: “This JRC report underlines why pollution from shipping, like that from many other sources, needs to be reduced both to help tackle climate change and to prevent severe damage to human health.”

However, the report could also provide a boost to a group of US airlines that are currently pursuing legal action against the EU over its decision to include flights to and from the bloc in the ETS.


UK shipping emissions “six times higher” than calculated