Imposing an emissions cap and trade scheme is the best option for curbing carbon emissions from shipping in EU waters, a report for the European Commission has found. CE Delft’s study “Technical support for European action to reducing greenhouse gas emissions from international maritime transport” was commissioned to give direction to EU plans to act on maritime emissions in the absence of any global moves. The lack of any outcome at the UN’s Copenhagen climate conference in December has only raised expectations that the EU would institute its own controls on the sector.

While maritime emissions are estimated at 3.3 per cent of total emissions worldwide, the Delft study estimates that the emissions of ships visiting EU ports was equivalent to 6.1 per cent of the trading bloc’s overall emissions. This higher-than-previously-estimated figure puts shipping into the big league alongside the industrial and energy emitters already covered in the EU ETS. With aviation set to be included in the EU ETS from 2012, efforts to implement shipping emissions regulation at the UNFCCC dragging, and similar efforts at the International Maritime Organisation (IMO) uncertain, this statistic will only add to motivations in Brussels to regulate the sector’s carbon footprint.

The study found under best future scenarios for the development of low carbon technology and fuel efficiency improvements, emissions will still rise without regulation – mainly due to forecast growth in sea trade. “Even if efficiency gains were to be higher than expected, and all the cost-effective abatement options identified in this report implemented, emissions would still probably continue to increase,” the report states. Yet on consideration of those improvements it found that effective mandatory measures to force ship owners to implement them could reduce emissions by up to 47 per cent below business as usual levels by 2030.

The study considered a long list of regulatory possibilities available and settled on five broad approaches for comparison; a cap and trade scheme, a baseline and credit scheme, a carbon tax/bunker fuel levy, mandatory efficiency standards and voluntary action. On the basis of cost and environmental effectiveness, and ease of implementation, the study placed cap and trade at the top of the pile. The best options would be either inclusion of shipping as a covered sector in the EU ETS, or a separate cap and trade arrangement that was linked to the EU ETS.

It recommends the scheme apply to emissions on all voyages to EU ports, with most emission permits auctioned rather than given away. It found that a carbon tax could also reduce emissions in shipping by a similar volume. But it would be harder to implement and the most emissions benefit would come from investing the tax revenues in emissions reductions elsewhere – such as in clean technology in developing countries, as had been proposed at the UNFCCC.

The study had mixed feelings about efficiency standards, agreeing that the IMO’s Energy Efficiency Design Index (EEDI) plan had merit. It would extend emissions reductions well beyond the EU but the ability of ship owners and operators to avoid their responsibilities would be significant. An alternative emissions trading approach to cap and trade is a baseline and credit scheme. This could be based on generating tradable credits, using the EEDI as the baseline for efficiency improvement, but avoidance possibilities would be greater than under cap and trade, the report says.

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