Shippers, ship owners spar over bunker levy
Groups representing shippers and ship owners are sparing over proposals to reduce the production of greenhouse gases by the shipping industry.
Last week the Global Shippers’ Forum, recently reorganized to become a higher-profile non-governmental organization, stated it would “oppose any steps by the global shipping industry to impose a bunker levy on shippers as the means of raising money to fund an environmental compensation scheme to meet their climate change responsibilities to reduce carbon emissions.”
Proposals to reduce production of greenhouse gases, including the adoption of mandatory energy efficiency design standards for new ships, will be discussed by the Maritime Environment Protection Committee of the International Maritime Organization in July.
Sources say much of the shipping industry generally supports that idea, as do many developed countries. But other developing countries are said to be opposed, fearing it would create a precedent of an international organization limiting carbon emissions.
GSF claimed the International Chamber of Shipping (ICS) had earlier in the month “unveiled plans to develop a bunker levy scheme that it said could collect billions of dollars from the maritime industry,” and that the ICS has said it would “lobby the IMO to accept such a scheme as a means of heading off regional regulation, including emissions trading schemes.”
GSF Secretary General Chris Welsh said at the forum's inaugural board meeting in Leipzig, Germany on May 27, that its board would “welcome and support a voluntary shipping industry initiative to reduce carbon emissions through the IMO, but the shipping industry must take direct responsibility for setting and achieving a clear target for reducing its carbon emissions. Ship owners need to introduce a rigorous scheme targeting operational efficiencies and other measures to reduce shipping carbon emissions.
'Merely passing on shipping carbon costs to their customers via a bunker levy not only removes ship owner accountability but will not reduce carbon emissions,' Welsh added. 'The shipping industry should move quickly in setting up a voluntary carbon reduction scheme and in winning political support for this. The GSF would strongly back such an approach and would join the shipping industry in a campaign to secure the support of governments and member states within IMO.'
But Simon Bennett, director of external relations for the ICS, said his group “is not proposing or imposing anything. As the representative body of the global shipping industry, ICS has simply decided to express a preference for a market-based measure (MBM) based upon levy/compensation fund principles, as already proposed by governments at IMO.
“In short, our member national ship owners’ associations have concluded that a levy-based mechanism will be simpler, more transparent and easier to administer than an emissions trading scheme (which would also involve costs, both to the industry and its customers, but with an additional level of complicated bureaucracy),” Bennett said.
The United Kingdom and Norway have proposed emission trading schemes at the IMO and some ship owners feel this would be overly complex. In contrast, there are competing proposals for taxes or levies on bunker fuel by Denmark and joint proposal by the government of Japan and the World Shipping Council, which represents the liner shipping industry.
Chris Koch, WSC president and chief executive officer, said the proposal of Japan and his organization differs from the Danish proposal because it would provide incentives for ship owners to operate more efficient vessels, and exempt ships that meet certain standards from levies.
WSC and Japan seek to “establish a new, legally binding agreement, which would require new and existing ships to meet stringent, but realistic efficiency standards. These standards would increase in stringency over time and would result in a global fleet that is significantly more efficient and carbon-friendly than today’s ships,” the carrier group said.
Spyros Polemis, chairman of the ICS, said last month “the shipping industry has an instinctive dislike of unnecessary complication which will be the result of a system based on emissions trading.
“Governments are looking for leadership from the shipping industry about the market based measures we prefer to help reduce CO2, and to raise money for any environmental compensation fund that might be developed by governments. The meeting of our member national associations agreed on an MBM which is levy-based. Such a system should be developed by IMO,” Polemis added.
Bennett said his group was “slightly nonplussed by the other reported statements from GSF. On behalf of the industry, ICS has already set a target of reducing emissions per ton-mile by at least 20 percent by 2020.”
Bennett said the ICS “strongly supports the Energy Efficiency Design Index (EEDI),” which would reward ship owners operating more energy efficient ships.”
He said the group also supports the use by all ships of Ship Energy Efficiency Management Plans (SEEMP), which could be mandated by IMO next month.
ICS is already encouraging companies to use the SEEMP on a voluntary basis. However, the EEDI, and any subsequent MBM, will need to apply to all ships globally on a mandatory basis in order to deliver meaningful emissions reductions and, most importantly, the avoidance of serious market distortions that will benefit no one — including shippers.” ' Chris Dupin