How to curb CO2 emission in shipping industry?
25th October 2009 by Richard Gunawan
The international maritime transport community expects the annual volume of green-house gasses (GHG) emitted by commercial shipping to grow 55% to 1,345 metric tonnes (Mt) by 2020.
In 2007, global shipping’s GHG emissions reached 870 Mt — or roughly equivalent to Germany’s production over the same period – but that figure is expected to quadruple by 2050.
So what will the industry do to reduce its emissions and stem its impact on climate change?
According to Dr Anne-Marie Warris, an environmental advisor for the Lloyd’s Register Group who is actively involved in the marine industry, the IMO’s Marine Environment Protection Committee has put forth for consideration a number of voluntary instruments to reduce GHG emissions.
Among these is a tool called the Energy Efficiency Design Index (EEDI).
As new ships are expected to have to comply soon with mandatory performance standards, they will be subject to stringent CO2 emission rates based on the distance travelled or volume of freight carried. Under this scheme, new ship designs could be verified to ensure that they comply with the EEDI standards.
Alternatively, countries such as Denmark support a marine fuel levy, whereby ship operators are taxed based on the fuel they purchase. This is a simple mechanism to administer, but fuel taxes traditionally are not very effective in reducing CO2 emissions, Dr Warris says, because big polluters who can afford the tax will continue to emit CO2 into the atmosphere.
Critics say fuel taxes also do not provide incentives for organisation to find new technologies to reduce emissions.
The funds generated from the levy will be used to purchase credits that allow operators to exceed emissions limits. Some proposals suggest the funds should be used to finance adaptation projects monitored by the United Nations Framework Convention on Climate Change (UNFCCC) in developing countries.
There is also a talk about introducing an International Maritime Emission Reduction Scheme (IMERS).
This scheme is very similar to the carbon levy above, but with a slight variation. IMERS differentiates responsibilities between developed and developing countries. Ships would have to pay a levy on fuel for transporting goods to rich countries at 100% the applicable rate and a 0% levy to the poorest countries. The levy will be paid to a central account, bypassing national governments, ostensibly to ensure that all funds automatically will be distributed to climate change projects and not used for the pet projects of local authorities.
And finally, Germany, France and Norway support an Emission Trading Scheme (ETS) which is similar to the European Union Emission Trading Scheme.
Under this scheme, ship operators will be given allowances to emit a specified volume of green house gases. If these allowances are exhausted, ship operators will be required to purchase extra allowances from the carbon market. The supporters of ETS believe an open-market system will stimulate the purchase and sale of GHG-emission credits from outside the maritime sectors.
This ETS principle will be consistent with other measures developed by the UNFCCC as part of the Kyoto Protocol.
Richard Gunawan is Vice President for business and sustainability development for LRQA Asia. He has more than 15 years of commercial experience and is committed to assisting businesses in Asia to mitigate risks and to grow in line with CSR principles. Richard has an MBA and was educated in Australia. He also has spent more [...]