The European Emissions Trading System (EU ETS) poses an opportunity to integrate seaborne transport into greenhouse gas reduction policies. An integration would be a starting point for internalizing external climate related costs of maritime transport, bring-ing ocean shippbring-ing onto a more level playbring-ing field with other modes of transport that are already subject to internalisation efforts. European land-based transport is covered under the national emission targets of the Kyoto Protocol and aviation will be integrated
into the EU ETS starting in 2012. A European approach, however, would have to over-come several key challenges.
A key demand of a successful instrument for curbing marine CO2 emissions is its envi-ronmental effectiveness. Since the presented approach is the integration into a regional European instrument, the instrument needs to be designed accordingly. The EU ETS for aircrafts includes all aircrafts that land or depart from a European airport. By virtue of its technical and operational characteristics, all distances to the first landing port out-side Europe are covered. The aim is to cover all distances that are related to a leg ar-riving or departing in Europe. If translated to seaborne freight, the aim would be to cover all distances of freight movements that relate to cargo arriving in or departing from a European port. However, vessels often call at multiple ports and the final voy-age prior to calling at an EU port might be rather short. Another more comprehensive and environmentally more ambitious goal would be to cover all emissions from vessels entering or leaving EU ports, regardless of whether the emissions occurred on trips to Europe or not. The questions this report tries to answer include:
Which vessel movements shall be integrated into the instrument? (landing, de-parting, passing, exterritorial, etc.)
For which movements can an instrument be enforced – administratively and le-gally?
Related to the geographic coverage and environmental effectiveness is the question of what to take as baseline emissions and where to set the emissions cap. The identifica-tion of baseline emissions and the quesidentifica-tion of setting a CO2 emissions cap for seaborne trade is not trivial because seaborne trade shows much larger fluctuations, is more flexible and is more difficult to monitor than airborne freight. The setting of a lax cap would quickly counter the potential impulse the Emissions Trading System could have.
Which ships and movements shall be included for identifying emission baseline and setting the cap?
How would the data be collected and the correctness monitored?
How tight should a cap be set and how should it develop over time?
The GHG emissions from seaborne trade are in direct correlation with the fossil fuels consumed. The three Kyoto GHG gases which are most relevant are carbon dioxide, methane and di-nitrogen oxide4. Other (Kyoto) GHG do not play a major role – with some potential exceptions: the emissions of refrigerants. Their impact on seaborne GHG emissions, for example, should be further researched. CO2 is so far the only gas covered by the EU ETS5. Other fuel based gases, in particular CH4 and N2O, also play
4 This study will refer to CO2 for direct carbon dioxide emissions and GHG for the CO2 equivalent emis-sions taking CO2, CH4 and N2O into account.
5 Starting in 2013, N2O from the chemical industry will also be introduced into the EU ETS.
a minor role in the GHG effect of transport emissions, but are omitted in the EU ETS.
The fuel consumption may be monitored directly, indirectly through distance and mod-elling or indirectly through cargo transport activities and modmod-elling. Key questions with regard to the necessary monitoring schemes are:
What technical capabilities to monitor fuel consumption on ships already exist?
Can reporting fuel consumption be made mandatory?
Would it be possible to monitor vessel movements remotely?
Another key challenge of integrating ocean shipping into the EU ETS is the expected economic impact. The integration aims to internalize some of the environmental costs of international seaborne freight and other marine activities into the price of services.
Assuming that the integration would send a significant price signal, it may affect the maritime transport sector and international trade because long distance shipping may become more expensive. It is envisioned that the price signals translate into emission reducing innovations and the degree to which also trade and the economy at large might be affected is analyzed.
Last, the challenges of integrating seaborne transport are of a legal and political nature, the latter depending among other things on the economic impacts.
5 Emissions from German and European seaborne transport as the basis for evaluating environmental effectiveness
This chapter aims to roughly model the CO2 emissions that are caused by German and European seaborne trade, in order to assess the effectiveness and efficiencies of se-lected options. It is important to determine who causes greenhouse gas emissions in order to argue for the ethical responsibility for those according to the polluter-pays-principle. However, as it will be discussed later (Chapter 12) the legal principle that al-lows the implementation of instruments is a principle of being affected by environ-mental damages. Those two angles pose no contradiction. A detailed quantification of emissions and emission reductions is outside the scope of this study. It should be noted that ENTEC (2002) quantified European seaborne emissions. IMO has recently updated its global GHG study (2009).
The focus of this report will be on freight transport and freight vessels. Besides those, there are passenger cruise vessels, Roll-On-Roll-Off (RoRo) vessels for cargo and both passengers and cargo, ferries, offshore supply vessels, and fishing vessels that are internationally travelling and that cause greenhouse gas emissions. Global CO2 emissions from shipping are estimated to be 1 054 million tonnes CO2 6
. Of those, 212
6 The figure 1 054 t is taken from tables 3-7 and 3-11 of IMO (2009), while in the executive summary of the report a figure of 1 046 is named without reference.
MT are from non-freight vessels. 7.6 % or 80 MT of the emissions are caused by ferri-es7 (Buhaug et al. 2008). For the following discussion all pure freight vessels, all car carriers and half of the ferries are considered as international cargo shipping. This to-tals 842 MT or 79.9 % of the global CO2 emissions from ships.
For cruise vessels, fishing vessels and off-shore supply vessels different approaches in baseline setting, monitoring, and enforcement may need to be developed. However, all instruments discussed here will apply to those vessels as well. Since they play only a minor role and their effect on the European economy would only be indirect, they are not directly discussed in this study.