Bridges Trade BioRes • Volume 10 • Number 6 • 2nd April 2010

UN Maritime Agency Tackles International Shipping and Climate Change

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The International Maritime Organization’s (IMO) environment committee agreed that the IMO should be the focal point for discussions on any future agreement on reducing GHG emissions by the maritime transport industry. However, members of the IMO’s Marine Environment Protection Committee (MEPC) who met in London on 22-26 March are divided on what specific action should be undertaken.

Echoing the debate in other aspects of the climate change negotiations, a number of developing countries argued that an agreement needs to respect the principle of Common But Differential Responsibilities (CBDR), in which obligations would vary depending on a county’s level of development. In contrast, developed countries stressed the importance of the No More Favorable Treatment principle, meaning that ships from all countries should be treated equally, as is the case with all other IMO Conventions.

The concept of CBDR is particularly complex in the context of transport fuels. Among developing countries there are diverging interests between emerging economies and developing countries with a significant shipping industry on the one hand, and the vulnerable economies that are most threatened by climate change, on the other.

Next steps

A majority of members at the IMO meeting agreed that a group of experts should be established to undertake a feasibility study and impact assessment of Market-based Measures (MBM) to reduce GHG emissions. The expert group will report back to MEPC in September and to the Cancun Climate Change Conference (COP 16) in December.

Several market-based measures will be considered:

Emission Trading (Cap and Trade): Norway, Germany, France and the UK prefer a global, open emissions trading scheme (ETS), administered by an international body, such as the IMO. In fact, the EU threatened to include shipping in the EU ETS and to set efficiency requirements by August 2011 if no progress is made in the IMO.

Bunker Use Levy: Proposed by Denmark, this scheme is considered by some to be the simplest of the three proposals. The downside of this scheme is that there may be less impetus for ships to improve their energy efficiency performance as opposed to an emission trading scheme.

Trade in Energy Efficient Credits: This scheme establishes mandatory efficiency standards for new and existing ships. The Energy Efficiency Design Index (EEDI) would provide a means to measure and improve on the efficiency of all ships and allow ships to trade efficiency credits to comply with the efficiency standard. Countries at the MEPC meeting agreed on very preliminary text to mandate requirements for the EEDI. While this approach does not place a cap on emissions in the shipping sector, it does provide for definitive performance standards. This is a US proposal with the support of Australia and most of the shipping industry.

Canada - US regulations on bunker fuels approved

The IMO also adopted the US and Canada’s proposal to ban the use of the dirtiest types of shipping fuels, commonly referred to as bunker fuels, within their coastal waters.

The new regulation is expected to cost US$3.2 billion to bring ships up to compliance levels, according to the U.S. Environmental Protection Agency (EPA). The EPA also estimates that eliminating these fuels will save an estimated 14,000 lives in the US and Canada, and will provide relief to 5 million people who suffer from air-quality related illness.

The US and Canada first proposed the measures in March 2009, after years of pressure from environmental groups. The rules will apply to all cargo ships, oil tankers, and large cruise ships that pass within about 320 kilometres of the US and Canadian coastline, and will become enforceable in August 2012.

ICTSD Reporting; “Big Victory for Clean Air! Emissions Control Area Created Around US and Canadian Coastlines,” Treehugger.com, 26 Mar 2010; ‘ “Dirty Bunker Fuel Banned for Large Ships in US, Canadian Waters,” Environmental News Service, 26 March 2010; “New rule cuts ship pollution around US, Canada,” Associated Press, 27 Mar 2010.