14 Carbon dioxide emissions from maritime
transport
| Committee's assessment
| Legally and politically important |
| Committee's decision | Cleared from scrutiny
|
| Document details | Commission Communication and draft Regulation on reducing greenhouse gas emissions from shipping
|
| Legal base | Article 192(1) TEFU; co-decision; QMV
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| Department | Transport
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| Document numbers | (a) (35155), 11917/13, COM(13) 479; (b) (35147), 11851/13 + ADDs 1-4, COM(13) 480
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Summary and Committee's conclusions
14.1 Although the EU's greenhouse gas commitment does not extend
to international maritime transport, the share of such emissions
is expected to increase significantly, despite the measures taken
by the International Maritime Organisation (IMO). The Commission
therefore put forward in June 2013 a Communication (document (a)),
which was accompanied by a draft Regulation (document (b)), which
sought to establish a system for the monitoring, reporting and
verification of emissions of carbon dioxide from ships above 5,000
Gross Tonnage (GT).
14.2 We noted in our Report of 4 September 2013 that,
whilst the Government would have preferred to tackle emissions
from ships through the IMO, it supported the approach proposed,
subject to considering whether the Regulation would result in
an extension of EU competence, and what the costs for UK industry
might be. In view of this, we decided to hold the two documents
under scrutiny, pending further information on these points.
14.3 Our Report of 10 December 2014 noted that the
Government had subsequently provided a number of updates, the
most recent on 4 December 2014, when it reported that the Presidency
had agreed a text with the European Parliament, which was acceptable
to the UK, and on which a political agreement would be sought
at the Council on 17 December 2014. In view of this, it asked
if we would consider lifting our scrutiny reserve, but we said
that, whilst we were now broadly satisfied as regards the costs
of the measure, we would be prepared to lift scrutiny only if
the Government could assure us before the Council that its concerns
over competence had been addressed satisfactorily.
14.4 In a letter of 15 December 2014, the Government
again set out its position on the competence issue, and repeated
its request for scrutiny to be lifted in advance of the forthcoming
Council. However, our Chairman replied saying that, whilst we
were grateful for this explanation, the situation which had arisen
here was relatively common in relation to proposals of this sort,
and that we did not find the Government's response very convincing.
Consequently, we did not feel able to lift scrutiny at that stage
(although we noted that, when the Council reached a political
agreement earlier that day, the UK had abstained on the grounds
that the document had not cleared scrutiny).
14.5 We have now received a further letter of 13
February 2015, which confirms that the UK informed the Presidency
and Council Secretariat of its abstention, prior to the Council
on 17 December, and adds that the Government now concludes that
the Regulation does not represent an extension of EU competence,
but is rather an exercise of an existing, but previously unexercised,
element of shared competence. It also says that the limitation
this implies on future actions is both acceptable and inevitable
in this case, adding that it would have been damaging for the
UK to oppose a measure which reduced climate change emissions,
and where it was able to secure a workable and proportionate measure.
It suggests that this exercise by the EU of an already existing
shared competence through the adoption of the Regulation is less
significant than the substantive content, and that it was acceptable
for the UK to accept this otherwise sound draft Regulation.
14.6 We note this further explanation, which tends
to reinforce our feeling that the competence issues to which this
draft Regulation is said to have given rise are similar in kind
to those which arise on a wide number of comparable proposals,
and are thus less significant than was suggested in the Government's
initial Explanatory Memorandum. We also note that, notwithstanding
the fact that EU will be exercising a competence currently shared
with Member States, which will inevitably restrict the scope for
future Member State action in the field, the Government took the
view that it would have been more damaging for the UK to have
blocked this particular measure (though presumably it might in
other circumstances have taken the opposite view). Be that as
it may, we see no need to pursue this issue further, and we are
now content to clear the two documents, whilst expecting the Government
to be vigilant in future similar situations in ensuring that the
EU should only exercise its competence when this is fully justified.
Full details of
the documents: (a) Commission Communication:
"Integrating maritime transport emissions within the EU's
greenhouse gas emission policies": (35155), 11917/13,
COM(13) 479; (b) Draft Regulation on the monitoring, reporting
and verification of carbon dioxide emissions from maritime transport
and amending Regulation (EU) No. 525/2013: (35147), 11851/13
+ ADDs 1-4. COM(13) 480.
Background
14.7 Although the EU's greenhouse gas commitment
does not extend to international maritime transport, the share
of such emissions is expected to increase significantly, despite
the measures taken by the IMO. The Commission therefore put forward
in June 2013 a Communication (document (a)), which noted that
discussions within the Organisation on market-based measures had
so far been inconclusive, but identified three ways in which the
EU could address this issue in the meantime, with a system for
the monitoring, reporting and verification of emissions being
seen, not only as the most promising approach at that stage, but
also as providing a basis for further action in due course. The
Communication was accompanied by a draft Regulation (document
(b)), which sought to establish such a system for emissions of
carbon dioxide from ships above 5,000 Gross Tonnage (GT).
14.8 As we noted in our Report of 4 September 2013,
whilst the Government would have preferred to tackle emissions
from ships through the IMO, it supported the approach proposed,
subject to considering whether the Regulation would result in
an extension of EU competence, and what the costs for UK industry
might be (on which there was currently no indication). In view
of this, we decided to hold the two documents under scrutiny,
pending further information on these points.
14.9 As we noted in our Report of 10 December 2014,
we subsequently received a number of updates from the Government,
the most recent of these being a letter of 4 December 2014 from
the Minister of State at the Department for Transport (Mr John
Hayes) in which he reported that the Presidency had secured a
deal with the European Parliament, on which a political agreement
would be sought at the Environment Council on 17 December 2014.
He added that the proposed deal met the UK's aim of a workable
and proportionate Regulation and would not impose large upfront
costs on industry.
14.10 In view of this, the Minister asked if we would
consider lifting our scrutiny reserve, so as to enable the UK
to support a political agreement at the Council. However, we said
that, whilst we understood the Government's wish to go along with
this, and were now broadly satisfied as regards the costs of the
measure, we recalled that the initial Explanatory Memorandum
had said that it would be "considering whether the Regulation
would result in an extension of EU competence". As we could
not recall having seen any subsequent reference to this, we said
that we would be prepared to lift scrutiny only if the Government
could assure us before the Council that this concern had been
addressed satisfactorily, and indicate the reasons for this conclusion.
Subsequent developments
14.11 We next received from the Minister a letter
of 15 December 2014, in which he said:
"The potential extension of EU competence is
an issue to which the Government has given some thought. The subject
of greenhouse gas emissions from shipping is a matter of shared
competence as it is principally an environmental measure falling
within Article 4(2)(c) TFEU. If made, the proposed Regulation
would prevent Member States from legislating with regard to the
monitoring and recording of CO2 emissions from ships in a manner
inconsistent with the Regulation.
"The right of Member States to negotiate and
to conclude international agreements with regard to environmental
matters is expressly preserved in Article 191(4) TFEU, however
it is possible that the existence of the Regulation may encourage
the EU to try to assert external competence in this area in the
future.
"The Government will therefore, of course, examine
any future proposals carefully yand will strongly resist any such
extension of EU competence."
14.12 He added that he intended to revisit the extension
of EU competence "with vigour and in the name of virtue",
and repeated his request for us to lift scrutiny in advance of
the forthcoming Council.
14.13 Our Chairman replied on 17 December 2014 saying
that, whilst we were grateful for this explanation, the situation
which had arisen here — where (i) the EU might exercise
competence in an area where there is shared competence, and hence
displace action by Member States, and (ii) by occupying a field
with internal rules, would probably acquire external competence
— was of course relatively common in relation to proposals
of this sort. However, since the Government had specifically identified
this as a potential problem, we did not find it very convincing
simply to be told that it would — after the event —
examine any future proposals and strongly resist any extension
of EU competence (by which time, it might or might not be too
late).
14.14 In view of this, he said that we did not feel
able to lift scrutiny at that stage, although we were pleased
to have been told by officials that, when the Council reached
a political agreement earlier that day, the UK had abstained on
the grounds that the document had not cleared scrutiny. He added
that our assumption was that the Minister would be writing further
to confirm this, and would at that stage provide us with any further
thoughts on the competence question.
14.15 We have now received from the Minister a further
letter of 13 February 2015, in which he confirms that, following
our request for more information, the UK had informed the Presidency
and Council Secretariat of its abstention, prior to the Environment
Council on 17 December. He adds that, in the light of further
advice, the Government now concludes that the Regulation does
not involve an extension of EU competence, but rather represents
an exercise by the EU of an existing, but previously unexercised,
element of shared competence, albeit with the result that the
UK could not introduce measures relating to monitoring, reporting
and verification of carbon dioxide emissions from maritime transport
which were incompatible with the draft Regulation. He also agrees
with our observation that this situation is relatively common
in relation to proposals of this sort, and says that such limitation
of future action is both acceptable and inevitable in this case.
14.16 The Minister concludes by rehearsing at some
length the conduct of the negotiations, where he says that there
was a choice between accepting a Regulation in some form, or mobilising
and sustaining a blocking minority. He suggests that it would
have been damaging for the UK to oppose a measure designed to
reduce climate change emissions, and that, although its preference
was to address these issues in the IMO, the slow progress there
meant that the Council and European Parliament had encouraged
the Commission to make a proposal to include those emissions in
the EU's reduction commitment.
14.17 The Minister points out that the UK was a party
to this process, and was able to exert a powerful influence to
secure a measure which is workable and proportionate, and compatible
with (and able to inform discussions on) a global data collection
system developed in the IMO. In short, he suggests that the exercise
by the EU of an already existing shared competence through the
adoption of the Regulation is less significant than the substantive
content, and that it was acceptable for the UK to accept this
otherwise sound draft Regulation. Finally, the Minister says that
his department will scan carefully for upcoming EU proposals so
as to identify early indications of the Commission's thinking,
and assesses these for potential regulatory impacts and other
implications, such as subsidiarity or competence concerns, at
an early stage.
14.18 The Minister concludes by asking if we would
now consider lifting scrutiny in advance of formal adoption of
the proposed Regulation, which will be sought shortly.
Previous Committee Reports
Thirteenth Report HC 83-xiii (2013-14), chapter 11
(4 September 2013), and Twenty-fifth Report HC 219-xxiv (2014-15),
chapter 3 (10 December 2014).
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