ICS favours levy-based carbon fund

National shipowners’ associations of 36 countries representing all sectors and trades, considered pressing international issues of concern to the global industry. Issues discussed included the piracy crisis and the challenge of reducing shipping’s CO₂ emissions.

ICS decided that if market based measures to reduce CO₂ emissions are developed by governments then the international industry has a definite preference for a mechanism that is levy/compensation fund-based rather than an emissions trading scheme.

The meeting agreed that a levy-based system is the one that most shipping companies can live with in order to ensure a level playing field and the avoidance of serious market distortion. ICS concluded that a levy-based system will be simpler to manage and more transparent.

ICS chairman, Sypros Polemis, explained: “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.”

The immediate priority for ICS however, is to ensure that a package of technical and operational measures to reduce CO₂ emissions, which has been developed by the IMO, will be adopted by the MEPC in July, as amendments to MARPOL Annex VI. Most importantly this includes the Energy Efficiency Design Index (EEDI). Agreement at IMO will be vital to maintain the principle of global rules for a global industry, which cannot be guaranteed if detailed emission reduction measures are left to the high level climate change talks at UNFCCC, or the European Commission, which will be the likely result if agreement is not reached by governments at IMO this July. ICS national associations will be lobbying their governments hard to ensure that they support the adoption of IMO technical and operational measures, which ICS believes will deliver more than a 20% reduction in CO₂ emissions by 2020, per tonne-km of trade carried by sea.

ICS and ISF members debated the worsening piracy crisis in the Indian Ocean with ships being attacked on a daily basis and about 600 seafarers currently being held hostage for ransom. National shipowners’ associations agreed that the military needed to be given a firm mandate to immobilise the hijacked vessels that are being used by the pirates as mother ships to attack other shipping throughout the Indian Ocean, in order to push back the incidence of attacks towards the Somali coast and away from international shipping lanes. The military could also provide better information to shipping about the location of the motherships.

ICS members were also extremely critical of the lack of domestic legislation in many nations, including any offence of “intent to commit piracy” which has led to the absurd situation that pirates who are captured by military forces are often released back to Somalia.

ICS confirmed its decision that the use of private armed guards by shipping companies needs to be acknowledged, and that as a matter of urgency IMO must finalise guidance to flag states on this critical issue, since the only alternative facing many companies would be to avoid the pirate danger area completely. Diverting ships will have serious geopolitical implications and greatly damage the economies in the region.

The National shipowners’ associations took the important decision to integrate fully the ICS and ISF organisations so that they will be governed under a single board with effect from 1 June. The new organisation will be called the International Chamber of Shipping, and the International Shipping Federation will be maintained as a separate identity for employment affairs issues. ICS and ISF believe that these changes will make ICS and its member national shipowners’ associations even more effective as the representative of the global shipping industry.

Spyros M. Polemis will continue to serve as chairman of the new integrated ICS. Frank Leonhardt (Germany), Trygve Seglem (Norway), Capt Dirk Fry (Cyprus) and Gerardo Borremeo (Philippines) were elected as vice-chairmen of the new integrated ICS board of directors for 2011/2012.