EU Regulation on CO2 Reporting a Setback for ICS Efforts

 

The global trade association for shipowners – the International Chamber of Shipping (ICS) – is
disappointed and concerned that the European Union is about to pre-empt negotiations taking
place at the International Maritime Organization (IMO) on the collection of data on CO2 emissions from ships, by unilaterally adopting a regional Regulation which will apply to non-EU flag vessels, as well as ships registered in the EU.

The Council of Ministers, the European Parliament and the European Commission are understood to have reached agreement on the text of an EU Regulation on the Monitoring, Reporting and Verification (MRV) of ships’ CO2 emissions, for formal adoption early next year.

The industry fully 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 certainly 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 by the European Commission to reflect the final outcome of any 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 Secretary General, Peter Hinchliffe remarked: “If the negotiations at IMO are to succeed it will be incumbent on the EU Member States to explain that they are acting in good faith and that the outcome at IMO will be the product of a genuine global consensus achieved through negotiation rather than as a result of a pre-existing unilateral regional arrangement.”

The inclusion of data on cargo carried by ships in the EU Regulation will need to be handled with particular sensitivity because of the suspicion that the intent is for this to 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.

Shipping is a global industry requiring global regulation. ICS can see no reason why the EU needs to finalise this regional Regulation so quickly when it will not be implemented until 2018. ICS believes it would be far better if the EU institutions delayed final adoption until after IMO has been given a proper chance to build on the good progress it has recently made towards delivering a global regulation on data collection.

The fact that IMO has already adopted a mandatory global regime of technical and operational
measures to reduce shipping’s CO2 emissions – which entered into force in 2013 as a result of
amendments to the MARPOL Convention – demonstrates that the UN body is eminently capable
of developing a global CO2 data collection system.