Cutting Carbon Emissions in Shipping: The IMO and the EU in Competing Positions

This article was first published in the April edition of the Marine & Maritime Gazette, and the original article can be found on page 16 here.

The cutting of carbon emissions across all industries has increasingly become the focus of legislation in recent years. Conventions such as the Paris Agreement, ratified in October 2016, seek to bring the global community together for this purpose. Measures that are due to be introduced include the purchase of carbon credits on the international or domestic markets to offset emissions and more emphasis on renewable projects. The goals of these agreements are wide in scope and set the bar very high - for example the agreeing Paris nations must peak their carbon emissions as soon as possible with "rapid reductions" thereafter.

The estimated total CO2 emissions by the shipping industry in 2012 accounted for 2.2% of all emissions for that year. Although this is, in fact, a reduction in emissions from the pre-2008 industry peak, it is still clear that shipping is a major emitter of greenhouse gases. Any legislation that seeks to control and reduce the amount of emissions must therefore include shipping as a key part of their considerations in doing this.

The IMO has been working with the industry and with individual states to formulate its own carbon reduction strategy. The IMO's Marine Environmental Protection Committee (MEPC) has approved a "Roadmap" for the reduction of greenhouse gas emissions, with a reduction strategy to be adopted in 2018. Considering the worldwide reach of the IMO and the commitments shown in the Roadmap, it had been thought that the industry may be left to regulate itself in these matters. Not so, according to the European Union.

In spite of the commitments of the IMO, there are some within the European Union who are expressing impatience that the shipping industry has not already set itself global reductions targets. This anxiety has been expressed, for example, by the European Commission's Climate Actions Directorate (ECCAD). It is not enough, according to them, for the IMO to call for a strategy, but the industry must be given a target.

As a sign of the seriousness with which it takes its position, the European Parliament recently voted to include shipping in the EU emissions trading scheme from 2023, in the absence of an acceptable alternative proposal from the IMO by 2021.

This has caused consternation, even exasperation, by many in the shipping industry, including not least the European Community Shipowners' Association (ECSA). The industry's reaction via bodies such as ECSA is that the EU is seeking to force the hand of the IMO in its strategy, when it is already committed to regulation. ECSA has stated the European Parliament's vote "ignores and undermines" the Roadmap put in place by the MEPC, which had in general met with widespread approval in the industry. It has also been seen as counterproductive to the global dialogue institutions such as the IMO and the European Union should have in these matters.

To counter this, the ECCAD has stated that, far from undermining the IMO's efforts, it should seize the opportunity and take advantage of its own commitments by now committing to a firm target next year. In spite of what has been seen as an attack on the IMO's supposed lack of initiative on this issue, they believe that now is the time for these institutions to cooperate. This dialogue may take some time to develop, however - the European Parliament vote has still to be ratified by the European Commission and European Council.

Whatever the outcome of this fraught negotiation, it is clear that there is always a definite political angle when it comes to environmental matters. This is especially so in the shipping industry, where there are so many interested and competing bodies looking to have a say. Although the UK has decided to leave the EU, as it is still our major trading partner, the outcome will still most likely have a significant impact our shipping industry as well. 

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