[150711.EN.SEA] World Shipping Council Seeks To Impose Industry Costs Through Eco-fines

THE World Shipping Council (WSC), representing the world major carriers, and Japanese regulators have devised a plan that would impose eco-fines on ship operators for not complying to rising environmental standards.

Major WSC ocean carriers said it hopes the joint proposal will contribute to the efforts at the IMO to reduce the shipping industry's carbon emissions, according to Newark's Journal of Commerce.

The accord emerged from the Japanese Ministry of Land, Infrastructure, Transport and Tourism paper called the Vessel Efficiency Incentive Scheme, to be presented to the UN's International Maritime Organisation.

It is understood that meeting environmental regulatory costs cripple smaller shipping companies, which helps big ones enlarge market share, which may accounts for the industry association's enthusiasm for government taxes and stringent regulation.

The document suggests new standards for all ships. Those in compliance would not be subject to fines, but would have to have to pay for costly new technology to meet the multiplying unfunded mandates. Ships that do not comply would be fined, based on the amount of fuel consumed and how far short they fell below the new standard.

But as there is considerable debate about the validity of climate change, there are many who are less receptive to the proposed mandatory energy efficiency design index (EEDI) for new ships that requires each vessel to have a ship specific Ship Energy Efficiency Management Plan.

"We appreciate developing countries are concerned that a positive IMO decision that will apply to all ships might prejudice their positions at UN Climate Change negotiations," said Peter Hinchliffe, secretary general of the International Chamber of Shipping (ICS), which also represent major carriers.

But WSC chief executive Chris Koch conceded that it appeared unlikely that proposals for a market based mechanism - cap and trade schemes - to control greenhouse gases will be adopted.

This comes after Chinese airlines balked at Europe's attempt to impose such a scheme, that would apply to carbon emissions beyond EU territory. The Chinese have been joined by US carriers, who have taken their case to court.

Earlier this month, EU officials said global accords to reduce maritime carbon emissions are unachievable through such schemes and instead were banking on IMO regulations through the Bahama initiative to be passed by the IMO.

"It is unrealistic to expect a MBM [market based measure] deal this year, next year, the year after, and maybe the year after that also," one senior EU source told EurActiv, reported London's Guardian newspaper.

Source : HKSG, 15.07.11.