EU Maritime Carbon Rules Must Avoid Global Row, Governments Say

The European Union’s planned rules to monitor greenhouse gases from ships must be in line with international law to avoid conflicts with other nations, according to member states including Italy and Ireland.

Draft rules to introduce monitoring, reporting and verification of carbon dioxide from ships starting in 2018 were discussed by EU environment ministers at a quarterly meeting in Brussels today. The European Commission, the 28-nation bloc’s regulatory arm, proposed the law in June to encourage global curbs on maritime pollution tied to climate change.

The proposal on shipping emissions followed the expansion of the EU carbon cap-and-trade program to international airlines last year, a move that spurred opposition from countries from the U.S. to China to Russia and triggered threats of a trade war. The draft law on ships doesn’t impose any pollution limits and aims to encourage the maritime industry to cut discharges by increasing transparency.

“Ireland supports the objective of the proposed regulation,” the country’s Environment Minister Phil Hogan said during a ministerial debate today. “In this context, it’s important that we take on board lessons from our experiences with the aviation sector and seek to ensure that what we’re proposing to do at the EU level will contribute to further progress at the wider international level in the IMO.”

Large Ships

The draft law, proposed after the International Maritime Organization made little progress in the past decade to agree on a global framework, would oblige the owners of ships larger than 5,000 gross tons using EU ports to report annual discharges of carbon dioxide, the main gas blamed for global warming. The measure is meant to be a “building block” for worldwide emission curbs and needs support from EU governments and the European Parliament to become a law.

Global maritime transport accounts for 3 percent of international CO2 discharges, and emissions from ships are expected to more than double by 2050, according to the commission. The proposed European system would cut pollution from the journeys covered by as much as 2 percent compared with a “business as usual” scenario and reduce net costs to ship owners by as much as 1.2 billion euros ($1.6 billion) a year in 2030, the commission has said.

“Given the international dimension of climate change and indeed the international character of maritime transport, action at global level will always be more effective than at regional level,” EU Climate Commissioner Connie Hedegaard told ministers today. “However, global progress, or a lack of global progress, should not defer us from taking relevant policy actions at the EU level.”

Clear Agreement

The Dutch government sees the need for measures to reduce emissions from shipping and supports efforts to reach a global agreement, Environment Minister Wilma Mansveld said, adding that her country has some concerns about possible exteritorial nature of the EU proposal.

“Until it becomes clear what the global agreement will look like, then within the EU we need to have a simple and flexible instrument,” she said. “That means it has to be less complex than what is being proposed.”

The EU law would be adapted to any global standards, according to the commission. The IMO has already introduced mandatory efficiency measures and established a group to evaluate proposals on market-based mechanisms.

Monitoring System

“We would call for us to anchor this to the international scene and to link in with the provisions of the IMO,” said Marco Peronaci, Italy’s deputy ambassador to the EU. “And we should use that then to develop the best practice and avoid duplication. We should also do this to avoid repeating problems and controversies as we saw in the aviation sector.”

Poland’s secretary of state and climate envoy, Marcin Korolec, said his country can’t support the commission’s initiative to create a regional monitoring system for maritime transport. All activities undertaken to reduce emissions should be realized at the IMO level and the EU should promote its objectives in the organization, he said.

The scope of the EU proposal is adequate and the measure is also supported by the shipping industry, which believes it will serve as an incentive to further reduce fuel consumption, according to Denmark’s Climate Minister Martin Lidegaard.

“The proposal strikes the right balance by creating a level playing field among global competitors for reporting emissions while minimizing the industry’s administrative burden,” he said during the ministerial debate. “The proposal will not obstruct international talks. On the contrary, it will make a valuable contribution.”

Economic Cost

The reporting obligation would apply to ships on voyages to, from and between EU ports, regardless of where the vessels are registered, under the draft law. Owners would also be required to provide other information such as data to determine the ships’ energy efficiency, according to the commission.

While the proposal is a good basis for discussing regional measures, it should be modified so that it achieves the greatest possible reduction of carbon dioxide with the least possible economic cost for the EU, according to Nicos Kouyialis, Agriculture and Environment Minister of Cyprus.

“This regulation must not violate international law and it must respect the confidentiality of commercial information that will be transmitted,” he said.

To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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