Shipper groups oppose bunker levy

Shipper groups oppose bunker levy    As the International Maritime Organization Marine Environment Protection Committee winds up a meeting in London this week, the Global Shippers Forum (GSF) said any scheme for controlling carbon emissions in the shipping industry should provide incentives for carriers using energy efficient vessels.
   Chris Welsh, secretary-general of the recently reorganized GSF, said Thursday the group is 'reviewing the various carbon scheme options on the table, including the World Shipping Council’s EIS (Vessel Efficiency Incentive Scheme) proposals. Shippers are under considerable pressure to mitigate and reduce their logistics and maritime supply chain carbon emissions from customers and consumers.'
   Part of the reason GSF reorganized is so that it can achieve status as a non-governmental organization at bodies like the IMO, However it is not officially represented at this week's committee meeting.

Welsh

   Welsh said “a bunker levy, or other forms of carbon taxation, would therefore be unacceptable to shippers, as it would be unlikely to affect demand for shipping, reduce carbon emissions and would result in higher costs to shippers. Such schemes would also remove the incentive for carbon improvement and diverts profits and cash that could otherwise be invested in greenhouse gas reduction actions. Any scheme likely to be acceptable to shippers therefore would have to be one that accurately monitors, measures and reports GHG emissions so that shippers can take an informed view of shipping line performance and action on GHG emissions.”
   But Welsh said the proposal put forth by the World Shipping Council and Japan 'have some attractions in that it is an incentivization scheme.'
   The WSC and Japan say their Vessel Efficiency Incentive Scheme would stimulate significant improvements in the carbon efficiency of the world's maritime fleet by establishing explicit efficiency standards for new and existing ships in the world fleet.
   Vessel efficiency would be measured using an energy efficiency design index (EEDI). At this week’s meeting the IMO considered a proposal to make EEDIs mandatory for new ships. There would be EEDI’s tailored for each type of vessel.
   A source said that while there was optimism early in the week that the Marine Environment Protection Committee would approve the mandatory EEDIs, those efforts had run into a snag Friday morning with a group of developing nations, including China, Saudi Arabia, Brazil, Argentina, Chile and India, opposing the proposal. It was not clear whether the impasse could be resolved before the meeting came to an end Friday.
   “New and existing ships meeting the specified standards would not be subject to any fees or costs other than those costs associated with the design and installation of more efficient ship technologies,” the WSC explained. “Those ships that fall short of the specific standards would be required to pay a fee (or penalty) that is based on the amount of fuel consumed and how far short of standard the specific ship falls. As such, the per-unit fee applied to each ton of fuel is adjusted based on the relative efficiency of the vessel.
   'Over the summer the GSF will set out the features and methodology of a recording, reporting and reduction scheme that would be visible to shippers and would form the basis for discussions with the shipping industry with a view to working together on a joint initiative,” Welsh added.
   Meanwhile at its quarterly meeting held in London Thursday, the British Shippers Council (BSC) rejected a bunker levy charge as a means to help the shipping industry reduce carbon emissions.
   'The bunker levy scheme has been vaunted as a way of capturing billions of dollars from the maritime industry, which can then be redistributed via the IMO into an environmental compensation scheme to help ship owners meet their climate change responsibilities and reduce carbon emissions,' the BSC said.

Snelling

   Christopher Snelling, BSC secretary, said 'a bunker levy in the proposed format would simply pass costs from ship operator to customer. The accountability for a ship's carbon performance surely lies with its owner; passing the buck by way of a bunker levy would be grossly unfair and do very little to tackle the real issue of curbing carbon emissions at the root of the problem.'
   'The key to reducing carbon is in the hands of the ship owners themselves, where the responsibility to improve operational and environmental efficiency must remain.'
   Earlier this year the Global Shippers' Forum stated it would welcome and support a voluntary shipping industry initiative to reduce carbon emissions through the IMO.
   GSF said it is collaborating on a new project to 'decarbonize the maritime supply chain from the shippers' perspective.' It said the project would provide tools to allow shippers to take positive steps to reduce their total maritime supply chain carbon emissions.
   Snelling said 'the depth of anti-bunker levy feeling from the BSC and GSF is too strong for the shipping industry to ignore and its message to ship operators is clear: take direct responsibility for setting and achieving a clear target for reducing your own carbon emissions.' ' Chris Dupin