Greenhouse Gas Emissions from Ships Abatement policy options for the EU Jasper Faber, 16 October 2007
CE Delft Independent, not-for profit consultancy Transport, Energy, Economy Over 10 years of experience with shipping Work for UNFCCC, EC, governments, NGO s
Outline Shipping, climate, policy The shipping sector Greenhouse gas policy for shipping Shipping and ETS In sum
Shipping, climate, policy Shipping most CO 2 efficient of all transport modes Shipping responsible for a large share of trade 2-4% of global CO 2 emissions (~ UK, IT emissions)
Shipping, climate, policy Shipping emissions growing rapidly Forecasted to continue to grow IPCC (2007): global CO2 emissions need to peak in 2010 fort 2 ºC
Shipping, climate, policy Policy objectives Reduce global CO 2 emissions Have shipping contribute to overall goal Policy constraints Prevent emissions increase due to reverse modal shift Prevent carbon leakage
GHG policy for shipping EU strategy to reduce atmospheric emissions from seagoing ships COM(2002)595: if the IMO has not adopted a concrete, ambitious strategy by 2003, the Commission will consider taking action at EU level to reduce ships unitary emissions of greenhouse gases
GHG policy for shipping 1. Voluntary commitments 2. Use & report IMO CO 2 index 3. Meet a unitary CO 2 index limit 4. Inclusion of refrigerant gases in EU regulation 5. A mandatory CO 2 element port infrastructure charging. 6. Inclusion of shipping in ETS 7. Allocation of ship emissions to Member States.
GHG policy for shipping Voluntary commitments No parties willing to enter into agreement Probably not effective Use & report IMO CO 2 index At best basis for voluntary efficiency improvements Limited effectiveness Inclusion of refrigerant gases in EU regulation Refrigerant gases contribute little to GHG emissions from shipping Allocation of ship emissions to Member States. Not a policy instrument per se
GHG policy for shipping Meet unitary efficiency limit value Allows flexibility to operators Efficiency incentive What would limit value be?
GHG policy for shipping Meet unitary efficiency limit value Limit value IMO CO 2 index? Source: Marintek 2005
GHG policy for shipping Differentiation of harbour dues or CO2 surcharge rebate system Basis: efficiency indicator Efficiency incentive Economic instrument based on existing institutions Differentiation base? Port competition?
GHG policy for shipping Differentiation of harbour dues or CO2 surcharge rebate system Basis: absolute emissions Emission charge Economic instrument based on existing institutions Effect in sector could be limited (maritime transport inelastic) Effect on global emissions would depend on use of revenues Port competition?
GHG policy for shipping ETS Cap In line with EU climate policy In line with polluter pays principle Allows flexibility Economically efficient
Shipping and ETS Which entity should be responsible for shipping emissions? Ultimately, the customer is responsible CO 2 emissions are a byproduct of transport Consumer has limited means to reduce emissions But can be incentivised by a price signal
Shipping and ETS Ship manufacturers Engine manufacturers Ship operators Shippers Fuel suppliers Have no control over emissions under some contracts (e.g. liner shipping, container traffic) Slow fleet rollover Efficiency improvement, no reduction of emissions See next slide
Fuel suppliers
Shipping and ETS Trading entity: ship operator Both technical and operational measures to reduce emissions Costs may be passed on to clients and ultimately to consumer
Shipping and ETS Which emissions to include? Emissions from fuel sold in EU Emissions of EU-flagged ships Emissions of EU-owned cargo All CO 2 emissions on voyages to EU ports
Emissions of EU-flagged ships
Emissions on voyages to EU ports
Shipping and ETS Remaining issues Allocation (use of auction revenue) Scope for evasion (off shore ship-to-ship transfers) Extra territorial impact of regulation
Shipping and ETS Which emissions to include? All CO 2 emissions on voyages to EU ports In line with polluter pays principle Responsibility aligned with economic benefit
Intermezzo: a global solution? Little progress UNFCCC: differentiated responsibilities IMO: uniform rules A possible solution IMERS, dr. André Stochniol Increasing global levy on fuel Fund mitigation, R&D and adaptation Uniform levy, differentiated use of revenue
In sum Reasons to include shipping in climate policy Ship emissions are rising rapidly Whereas global emissions need to decrease Of policy instruments considered Inclusion in ETS looks most effective But aspects need further study
Thank You Jasper Faber (faber@ce.nl)