EU overbreadth threatens to derail efforts to decarbonize shipping, warns ICS

The International Chamber of Shipping (ICS) issued a statement following the European Commission’s proposal to extend the EU’s Emissions Trading System (ETS) to cover the transport sector international maritime.

Guy Platten, ICS General Secretary, commented: “Apart from an ideological revenue-raising exercise, which will greatly upset the EU’s trading partners, it is difficult to see what the extension of the EU ETS to maritime transport will reduce CO2 emissions, especially since the proposal only covers around 7.5% of global maritime transport emissions. This could seriously delay climate negotiations for the remaining 92.5% of maritime transport emissions. “

“We know that non-EU states like Japan have already expressed concern about this excessive diplomatic reach and the imposition of a unilateral and extraterritorial trade tax. It cannot be fair that non-European shipping companies are forced to pay billions of euros to support the EU’s economic stimulus packages, especially under a program that undermines CO2 negotiations.

“It is clear from the way these programs operate in other sectors that there will be unintended consequences of imposing such a proposal. There are simpler and more efficient options, such as a global fuel tax, but these require political leadership rather than political opportunity. Another key issue for ICS is that whoever pays the cost of fuel must be the same person who ultimately pays the cost of carbon allowances.

“The lack of investment in research and development in the proposals, at a time when the IEA and the new US administration stress that reducing emissions will only be possible with the development of technologies that do not currently exist , is disappointing. Stating one thing early in the process and then pulling it out to pay for a post-covid recovery sends a clear message to the industry that the EU is not really serious about decarbonizing global shipping. It also sends a message beyond maritime transport that the political and investment risk is high in Europe. This just goes to show why we need the IMO’s USD 5 billion maritime research fund.

“The volatility of quota prices makes this approach much more complicated to pass the cost on to the company that pays for the fuel, especially for the majority of small shipping companies which make up the majority of shipping. This proposal is too bureaucratic. The industry’s overwhelming preference is for a global tax that will incentivize real emission reductions rather than bureaucracy.

“It is clear that an independent impact assessment of these proposals will be needed as soon as possible, to ensure that we do not drift towards unmanageable costs to world trade.

“ICS, together with its industrial partners, will examine in detail the latest draft proposals and will continue to highlight these concerns in discussions with the Council of the EU and the European Parliament. We need urgent action, but action must result in decarbonization rather than pure cash grab. “

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