ICS gives its view on carbon emissions

ICS says that current statistics suggest that the global shipping industry, which transports around 90% of world trade, only produced about 2.2% of the world’s total GHG emissions during 2012 compared to 2.8% in 2007.

Speaking out in advance of the United Nations Climate Conference COP20 which takes place in Lima from 1-12 December, ICS says it believes the industry is on track to reduce its emissions by more than 20% by 2020 (compared to 2005) with further reductions going forward.

A special brochure prepared for COP 20 by ICS says that the industry is the only industrial sector which is already covered by a binding global agreement to reduce its CO₂ emissions, through technical and operational measures agreed – with full industry support – by its global regulator, IMO. ICS explains that IMO is now developing additional measures to reduce CO2 emissions from shipping and that the UN Conference needs to maintain its support for IMO as the principal forum for addressing emissions from maritime transport, which cannot be attributed to individual national economies.

ICS emphasises that any decision, for example on whether to develop a Market Based Measure for shipping that might be linked to the Green Climate Fund (GCF), should be a matter for IMO Member States. IMO will be best placed to develop an approach that can reconcile the UNFCCC principle of ‘Common But Differentiated Responsibility (CBDR)’ – whereby developing countries are treated differently – with the need for all ships, regardless of flag, to be treated in a uniform manner.

Shipping is a global industry requiring rules on CO2 to be applied on a global basis to all ships. Apart from preventing market distortion in this totally globalised sector, this is necessary to avoid ‘carbon leakage’ since only about 35% of the world fleet is registered with those developed nations that are covered by emission reduction commitments under the existing Kyoto Protocol on climate change prevention.

The position of the shipping industry remains that any contribution by shipping to the GCF must reflect the sector’s modest contribution to total global CO₂ emissions. ICS is firmly opposed to any suggestion that the shipping industry should collectively pay tens of billions of dollars each year, stressing that the industry is not a ‘cash cow’.

In a related matter, ICS says it is disappointed and concerned that the EU may pre-empt negotiations taking place at IMO on the collection of data on CO₂ emissions from ships, by unilaterally adopting a regional Regulation on monitoring, reporting and verification (MRV) of ships’ CO2 emissions, for formal adoption early next year.

ICS supports the development of a global data collection system by IMO but the imminent adoption of a regional EU regime, which may not be compatible with whatever is agreed at IMO, will, it says, complicate and perhaps jeopardise these delicate negotiations.

Agreement at IMO will require the support of non-EU nations with which the vast majority of the global fleet is registered, including developing countries such as China and India for whom additional CO₂ regulations are a politically sensitive issue.

ICS fully appreciates that the draft EU Regulation, which will not be fully implemented until 2018, contains text to the effect that the required data which shipping will have to provide can be amended to reflect agreement at IMO. However, it is unclear whether the Commission will truly be willing to fully realign the EU rules with the agreed international consensus.

ICS adds that data on cargo carried by ships as required by the proposed EU Regulation will need to be handled with particular sensitivity because of the suspicion that this could lead to the development of a mandatory operational efficiency index. This could be used by governments to impose financial penalties on ships, regardless of their actual fuel consumption and CO2 emissions, with the risk of a serious market distortion.