Port of Rotterdam Calls for High Carbon Tax

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APM Terminals facility at Port of Rotterdam (file image)

By MarEx 2018-04-12 18:03:00

On Wednesday, as the IMO's Marine Environment Protection Committee (MEPC) closed in on a global CO2 emissions goal for shipping, the Port of Rotterdam called on the governments of northwestern Europe to establish a high tax on carbon emissions.  

The Rotterdam/Moerdijk port area wants to reduce its CO2 emissions by 20 million tons per year by 2030 (a decrease of 50 percent compared to 1990). If it is to achieve this goal, it will have to address transportation-related emissions: marine transport to and from Rotterdam generates about 21.5 million tons of CO2 every year, according to a recent survey. After 2030, an even more ambitious target - a 95 percent reduction by 2050 - will require the introduction of new technology, including different fuels. 

The authority's leadership hopes that a significantly higher CO2 price will stimulate new investments in the clean technologies needed to make this possible. “A price in the range of [$60 to $85] per ton of CO2 will stimulate companies to invest in solutions that we really need in order to realize the targets of the Paris Climate Agreement," said Port Authority CEO Allard Castelein at the agency's Energy in Transition Summit 2018. “I don’t support a solo approach, such as that of the UK with electricity production. As a transit country, the Netherlands is closely linked to the countries that surround it. A North-West European coalition would guarantee a level playing field for the industry.”

Under the current European Emissions Trading Scheme, an abundance of emissions permits has kept carbon prices relatively low, with benchmarks in the range of ten euros per ton. To spur investment in renewable energy, Netherlands Prime Minister Mark Rutte has proposed a national price minimum of 18 euros per ton for electrical power generation, and France has called for minimum carbon pricing in the range of 25 to 30 euros per ton for the sector. These two well-publicized proposals are limited to power generation and are targeted primarily at coal-fired power plants.  

In the marine transportation sector, the International Chamber of Shipping strongly opposes regional regulations on carbon dioxide emissions. The European Union has threatened to include the maritime industry in its own emissions trading scheme if IMO cannot implement global regulations for greenhouse gas emissions from shipping. 

Over the last month, ICS urged the delegates attending this week's MEPC meeting to compromise and agree on global CO2 emissions regulations in order to head off EU intervention. As of Thursday, the shape of an agreement appeared to be in sight. Reports from the meeting suggest that member state delegates are closing in on a target for a 50 percent reduction by 2050 - about half as ambitious as Rotterdam's goals, and roughly in line with a proposal by the Norwegian flag state.