Shipowners React to Sweeping EU Carbon Emissions Plan

European Commission headquarters, Brussels (EmDee / CC BY SA 4.0)

Published Jul 15, 2021 7:02 PM by The Maritime Executive

Shipowners' industry groups are raising concerns about the new European "Fit for 55" decarbonization plan, which will impose Europe's Emissions Trading Scheme (ETS) on vessel emissions for the first time. The measure covers all intra-EU voyages and 50 percent of the emissions of each voyage to and from European ports. 

 "Other than as an ideological revenue raising exercise, which will greatly upset the EU’s trading partners, it’s difficult to see what extending the EU ETS to shipping will achieve towards reducing CO2, particularly as the proposal only covers about 7.5 percent of shipping’s global emissions," said Guy Platten, the secretary general of the International Chamber of Shipping. "This could seriously put back climate negotiations for the remaining 92.5 percent of shipping emissions."

Platten characterized the regulation as a "pure money grab" and raised a host of concerns, including the financial impact on non-EU shipping companies; the effect on climate talks at IMO; the impact on small shipping companies; accounting challenges in passing on the cost of EU carbon credits to the charterer; and an absence of EU funding for maritime R&D, which is needed to develop low-carbon fuel alternatives. "The failure to include investment in research and development in the proposals . . . is disappointing," said Platten. 

The European Community Shipowners' Associations (ECSA) echoed this concern, calling for ETS carbon credit revenue from shipping to go towards shipping-related government expenditures.

"It is of utmost importance that the revenues from ETS are used to support the decarbonization of shipping and not added to [EU] member states’ general budgets," said Claes Berglund, ECSA’s president. "A sector-specific fund has already received significant support from the European Parliament, NGOs and industry stakeholders and we sincerely hope that the member states will take this strong signal into consideration going forward."

ECSA also highlighted potential enforcement and double-counting problems with the plan's support for biofuels - including biofuels purchased outside of the EU. In general, however, ECSA said that it "welcomes the increased climate ambition of the 'Fit for 55' package" and recognizes "that shipping should contribute its fair share to address the climate crisis, at EU level as well."

Danish Shipping also sounded a positive note, describing the EC proposal as "very reasonable." In addition, said executive director Maria Skipper Schwenn, the EU regional rules could help advance carbon negotiations at IMO. "If the EU plays its cards right, the tariffs in the proposal could be used to put pressure on the global CO2 prices at the IMO, and consequently contribute to creating unified, international solutions," Schwenn said. 

The Union of Greek Shipowners disagreed, arguing that the application of the EU ETS "seriously undermines the ongoing international efforts and negotiations towards the sector’s decarbonization." It also objected to the proposed FuelEU program for increasing uptake of sustainable marine fuels, arguing that fuel regulations should be applied to bunker suppliers instead. However, UGS expressed thanks for the commission's recognition that charterers - who buy the fuel and decide how to consume it - bear responsibility for emissions and compliance costs.