World’s largest Carbon Market Set for a Historic Revamp –

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Addis Ababa, July 12, 2021 (Walta) – The European Union is due to propose an unprecedented overhaul to its carbon market this week, seeking to put a price on shipping emissions for the first time.

And the region’s shipowners are deeply concerned.

The European Commission, the EU’s executive arm, is set to present its green fuel law for EU shipping on Wednesday. It is part of a broader package of reforms designed to meet the bloc’s updated climate targets.

To be sure, the EU has committed to reducing net carbon emissions by 55% (when compared to 1990 levels) through to 2030, becoming climate neutral by 2050. The EU says this will require a 90% reduction in transport emissions over the next three decades.

To meet these targets, the EU plans to undergo the biggest revamp of its Emissions Trading System since the policy launched in 2005. Already the world’s largest carbon trading program, the ETS is now widely expected to expand to include shipping for the first time.

Lars Robert Pedersen, deputy secretary-general of BIMCO, the world’s largest international shipping association, says it is no secret that the industry concerns the EU’s plans.

“There is a strange misbelief in Europe that these kinds of actions put pressure” on other regions to do the same, Pedersen told CNBC via telephone. “I think, frankly, it has the opposite effect.”

He argued the proposal was “not conducive” to international policy, would fail to reduce regional carbon emissions, and ultimately take money out of the shipping industry when it could otherwise be spent on reducing emissions in the fleet.

“It is taxation. Does that help anything when it comes to decarbonization? I don’t think so. It looks more like it is an effort to collect money — and so be it,” Pedersen continued. “Europe decides what Europe decides and there’s not so much you can do about that, I guess, other than highlight that it might not be the most appropriate way to reduce emissions.”

His comments come shortly after Transport & Environment, a European non-profit purportedly obtained a leaked proposal for a draft of the first-ever law requiring ships to progressively pivot to sustainable marine fuels.

A spokesperson for the commission declined to comment on the draft proposal. The EU has said action to address EU international emissions from navigation and aviation is “urgently needed” and initiatives to address these areas will be designed to boost the production and uptake of sustainable aviation and maritime fuels.

Pedersen said it was important not to panic over the leaked draft, noting that it could still be revised in the coming days and there are many more hurdles to overcome before the measures become EU policy.

EU member states and the European Parliament would first need to negotiate the final reforms, a process that analysts estimate could take roughly two years.

“To be frank with you, I haven’t even bothered to read it because I think it is a waste of time at this point. We have a date when the final proposal will be presented, and we will read that very carefully,” Pedersen said.

(Source: CNBC)

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