11 Carbon dioxide emissions from maritime
transport
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(35155)
11917/13
COM(13) 479
(b)
(35147)
11851/13
+ ADDs 1-4
COM(13) 480
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Commission Communication: Integrating maritime transport emissions in the EU's greenhouse gas reduction policies
Draft Regulation on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport and amending Regulation (EU) No. 525/2013
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| Legal base | (a) —
(b) Article 192(1) TFEU; co-decision; QMV
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| Documents originated | (a) 28 June 2013; (b) 2 July 2013
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| Deposited in Parliament | 5 July 2013
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| Department | Transport
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| Basis of consideration | EM of 17 July 2013
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| Previous Committee Report | None
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| Discussion in Council | See para 9.12 below
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared; further information awaited
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Background
11.1 The Commission says that, although the EU supports ambitious
international action to address climate change, and its 2008 Climate
and Energy Package is arguably the most comprehensive regulatory
framework globally, international maritime transport is not included
in its greenhouse gas emissions commitment. At the same time,
it points out that shipping — which
it describes as an essential link in the global supply chain,
and a key sector for the EU economy —
accounts for 4% of such emissions, and that these are expected
to increase significantly in the future, despite the adoption
by the International Maritime Organisation (IMO) of minimum efficiency
standards for new ships. Consequently, it suggests that, whilst
shipping may still be comparatively less polluting than other
forms of transport, there is a significant potential for reducing
emissions through a range of technical and operational measures,
and that there is a clear case for taking action. It has accordingly
put forward a Communication (document (a)) suggesting how maritime
transport emissions can be integrated into the EU's wider greenhouse
gas reduction policies, which is accompanied by a draft Regulation
(document (b)) on the establishment of monitoring, reporting and
verification arrangements for carbon dioxide emissions from that
sector.
The current documents
Commission Communication (Document (a))
11.2 The Commission notes that, on the international
front, the IMO started work in 1997, based on the principles enshrined
in the International Convention for the Prevention of Pollution
from Ships (MARPOL) and other Conventions, and that it has most
recently taken steps in 2011 to reduce air pollution from ships
through the Energy Efficiency Design Index and the Ship Energy
Efficiency Management Plan. The Commission says that these are
expected to deliver a significant reduction, but that, despite
this, more needs to be done. It also notes that discussions have
taken place within the IMO on market-based measures, including
those leading to enhanced efficiency, and that, although these
discussions have so far been inconclusive, it has a strong preference
for a global approach, and has thus been (and will continue to
be) actively engaged in them. In the meantime, it says that the
robust monitoring, reporting and verification of emissions is
seen as a first step, and that the EU is working with others to
develop a global scheme.
11.3 The Commission then discusses ways in which
emissions from ships can be included within the EU's reduction
commitment. It says that recent developments in the IMO provide
the basis for a gradual approach, with three subsequent steps:
- implementing a system for the
monitoring, reporting and verification of emissions;
- defining reduction targets; and
- the application of a market-based measure.
11.4 It sees the first of these as the foundation
of any approach, and as a useful step in its own right, arguing
that, even without a market-based measure in place, a lack of
awareness of the benefits and the return on investment hinders
the introduction of available technologies on a larger scale,
and that such information would provide owners with a useful insight
into the performance of individual ships and better equip them
to take major investment decisions. It also points out that such
an approach would actively contribute to an agreement on global
measures, and allow for informed discussion within the EU on market-based
measures and reduction targets.
11.5 The Communication then looks in more detail
at the possible options, as follows:.
Monitoring and reporting
It notes that carbon dioxide emissions in the sector
are related to the amount and type of fuel consumed, with information
on consumption being already available for most ships as a result
of the MARPOL Convention, but that a reporting and verification
process still need to be established (which in the long-term could
also apply to all air emissions, including sulphur and nitrogen
oxides and particulate matter). It accordingly suggests that a
monitoring, reporting and verification scheme based on fuel consumption
should be started on a regional level, with the aim of providing
the basis for a global scheme by identifying difficulties and
best practices, and that it should also include a range of energy
efficiency parameters. However, it adds that the new system should
not impose a specific methodology, and that, as long as the methodology
selected and its uncertainties are reported, ship owners should
be free to build upon existing practices.
Intermediate reduction targets
The Commission recalls that, in order to limit global
warming in line with the target set by the United Nations Framework
Convention on Climate Change (UNFCCC) , global greenhouse gas
emissions in 2050 need to be reduced by at least 50% compared
with 1990 levels, and that the EU has committed in the medium
term to a reduction of 20% by 2020 (or 30% in the context of a
global deal). It also points out that, although international
maritime transport is the only sector with a reduction target
not covered by EU legislation, its 2011 White Paper on Transport[33]
established a target of 40% by 2050 compared with 2005 (or 50%,
if feasible). Nevertheless, it adds that consideration of intermediate
targets will need to take into account the broader 2030 climate
change and energy policy framework, and should consider aspects
such as environmental effectiveness, particularly as regards cumulative
carbon dioxide reductions, costs, the development of emissions
after 2005, possible new efficiency standards adopted by the IMO,
as well as the availability and costs of present and future abatement
technologies.
Market-based measures
The Commission says that an impact assessment has
demonstrated that such measures are an effective and well suited
way of achieving emission reductions, whilst providing economic
benefits as a result of the substantial associated fuel savings.
It adds that market-based measures can remove barriers, especially
the split of incentives between ship owners and operators, and
those relating to access to finance. It also notes that the impact
assessment identified the three most promising options as being
a contribution based compensation fund (involving a voluntary
contribution based on a ship's level of carbon dioxide emissions);
a target based compensation fund (establishing a target for each
ship, and involving a contractual relationship with a sector-wide
entity); and an Emissions Trading System (requiring each ship
to surrender allowances corresponding to its emissions). The Commission
says that the precise design of any option would require further
work, and that the current proposal for a monitoring, reporting
and verification scheme is intended to underpin any future market-based
measures, on the basis of the discussions taking place within
the EU and the IMO.
11.6 The Communication also looks at parallel measures
to reduce market barriers, and says that, as a follow-up to its
2011 White Paper, it is developing a strategic framework for transport
research, innovation and deployment for an integrated, efficient
and environmentally friendly European transport system. It says
that, following discussions with a number of interested parties,
it may prioritise areas for further analysis and future initiatives,
linking any such work with efforts within the IMO (for example,
on fuel consumption standards, and the measurement of hull and
propeller performance). It also notes the importance of land-based
infrastructure, and the support which it already gives to the
development of port electrification and alternative fuels such
a liquefied natural gas through financial incentives and regulatory
measures. Finally, it notes that, as many energy efficient approaches
have substantial upfront capital costs, the support facilities
available from the European Investment Bank could be useful, particularly
in the current economic climate; and it also points to the substantial
research efforts which will be needed in the long term under the
proposed Horizon 2020 framework to achieve a low (or even zero)
carbon maritime transport, building on the substantial funding
already provided under the Seventh Framework Programme.
DRAFT REGULATION (DOCUMENT (B))
11.7 Against this background, the Commission has
also put forward, as the first step of a staged approach, a draft
Regulation to establish a European monitoring, reporting and verification
system for emissions from ships of carbon dioxide (which it says
account for 98% of greenhouse gas emissions from the sector).
This would:
- apply (with certain limited
exceptions) to ships above 5000 Gross Tonnage (GT),[34]
irrespective of their flag, calling at EU Member States' ports;
- require emissions to be monitored
and reported on an annual basis, using one of four monitoring
methods,[35] and in accordance
with a monitoring plan drawn up by the company which has responsibility
for the ship's operations;
- provide for the calculation of emissions based
on fuel consumption and type and energy efficiency, using data
already available;
- cover emissions during a ship's voyage from its
last port of call before arriving at a port of an EU Member State
and to its next port of call after leaving a port of an EU Member
State;
- cover emissions from intra-EU voyages, and which
occur within a port of an EU Member State;
- require reports to be verified by an independent,
accredited verifier (which would, where appropriate, issue a document
of compliance, to be kept on board); and
- require Member States to enforce the requirements
laid down by means of effective sanctions.
11.8 The Commission stresses that any such EU system
should serve as a model for the implementation of a global system,
and that any relevant information on the implementation of the
Regulation should be shared with the IMO and other international
bodies. It also says that, when an agreement on a global system
has been reached, the EU system should be reviewed, with a view
to aligning it to the global system.
The Government's view
11.9 In his Explanatory Memorandum of 17 July 2013,
the Parliamentary Under-Secretary of State at the Department for
Transport (Stephen Hammond) says that, whilst the Government maintains
its rights as a sovereign State and strongly supports action at
a global level on greenhouse gas emissions from ships, it recognises
that a harmonised monitoring, reporting, and verification system
would be more effective than action at Member State level. It
consequently considers the proposal is in accordance with the
principle of subsidiarity as set out in Article 5 of the Treaty
on the European Union. At the same time, it shares the Commission's
preference for emissions from ships to be tackled at the international
level in the IMO, and it therefore regards an EU measure as a
'second best' option. It is also considering whether the Regulation
would result in an extension of EU competence, which in principle
it does not favour.
11.10 The Minister says that the Government supports
the Commission's decision not to proceed at this stage with a
market based measure, as it believes that further time should
be given for the global discussions. It is also conscious of the
widespread opposition to the inclusion of international aviation
in the EU Emissions Trading System (ETS), resulting in negotiations
in the International Civil Aviation Organization on a global agreement
which would resolve that dispute (and which the Government would
not want the current proposal to jeopardise when the ICAO Assembly
meets in September 2013). Likewise, it is conscious that legislation
to bring in an EU measure, even if confined to monitoring, reporting
and verification, could be a cause for concern within the IMO,
not just to certain developing countries opposed to any measures
to address greenhouse gas emissions there, but also to those non-EU
States (including — but by no means limited to — Australia,
Canada, Japan and the USA) which work closely with the UK to achieve
results in the IMO. It says that it will seek to manage these
challenges, and to sustain an effective working relationship with
its EU and non-EU partners, which it regards as imperative to
achieving UK objectives in the IMO.
11.11 If there is to be an EU regime, the Government:
- supports a flexible and non-prescriptive
approach, noting that the proposal will give ship owners the flexibility
to use any of the four goal-based monitoring approaches identified
to measure fuel consumption or carbon dioxide emissions (which
it says is in line with the light touch it favours);
- considers that the proposal complies with the
proportionality principle by focusing only on carbon dioxide emissions,
which represent about 98% of the shipping sector's greenhouse
gas emissions according to the Commission's Impact Assessment,
and by applying the measure only to ships above 5000 GT (which
the Commission says would have the effect of excluding almost
half of the ships above 300 GT which called in EU Member States'
ports in 2010, while still covering approximately 90% of their
total emissions);
- observes that, although the Commission has described
the proposed requirement as "simple and lean", it is
not, on the face of it, as lean as the Government would wish,
as it requires the submission of various items of data, including
cargo carried, time spent at sea and average energy efficiency,
which it does not consider to be essential: however, it adds that
the Commission has explained that some of these items are included
specifically to support the work in the IMO, which requires a
range of data;
- supports the Commission's proposal that the Regulation
should be flag neutral and apply to ships of all flags calling
at EU Member States' ports, so as not to disadvantage the shipping
industries in the UK and other EU Member States;
- favours a relatively simple verification process
which would not be too burdensome for the industry: and, although
it does not have any substantive concerns on this as yet, it notes
that the details of verification are at an early stage and that
it will be necessary to engage with the Commission and with other
Member States as discussions progress; and
- will be considering further before taking a firm
view on whether those provisions which would give the Commission
the power to adopt delegated acts are appropriate.
11.12 The Minister also comments on the financial
implications of the proposal, pointing out that the Commission
has indicated that the monitoring, reporting and verification
of emissions from ships would encourage ship owners and operators
to improve energy efficiency, and that this would result in fuel
savings of 2% and could lead to annual cost reductions of up to
€1.2 billion in 2030. The Commission also estimates the total
administrative burden for all ships over 5000 GT would be €26.1
million a year (which it believes should be fully compensated
by fuel savings). The Minister adds that, for public authorities,
the total administrative burden will be limited to the supervision
of monitoring and reporting, and enforcement, and is estimated
by the Commission at around €2.5 million per year: he also
says that there is currently no indication of the costs for UK
industry, but that officials have begun engaging with stakeholders
to ascertain what these might be.
11.13 As regards timing, the Minister says that the
Presidency is planning a possible exchange of views at the Environment
Council on 14 October, but that the timetable for consideration
by the European Parliament is not yet known.
Conclusion
11.14 Since international shipping is not currently
covered by the EU's greenhouse gas emissions commitment, it is
clearly logical for the Commission to explore what might be done
to address this situation at EU level, particularly in the light
of the current lack of progress within the International Maritime
Organisation, and we have noted the grounds on which it has concluded
that any legislation should initially concentrate on a monitoring,
reporting and verification scheme. We have also noted that, although
the Government would prefer a more widely applicable scheme, it
recognises that a harmonised system of the sort proposed would
be more effective than action at Member State level, subject to
it being satisfied as regards any consequential extension of EU
competence in this area.
11.15 Having said that, it is also clear that
the proposal could have important resource implications for ship
owners and operators, that some of the information which they
would be required to provide strikes the Government as excessive,
and that it will be seeking to establish what the costs of the
proposal would be. We also note that the Government is considering
whether the Regulation would result in an extension of EU competence.
In view of these outstanding issues, we are holding these two
documents under scrutiny, pending further information from the
Government.
33 COM(11) 144 Back
34
The Commission says that these represent 55% of the number of
ships calling into EU ports, and 90% of related emissions. Back
35
The use of bunker fuel delivery notes; bunker fuel tank monitoring,
flow meters for applicable combustion processes, or direct emission
measurements. Back
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