Carbon war of words heats up

Following criticism that the IMO was too open to lobbyists from the shipping industry dictating carbon policy (see ShipInsight’s previous post), Kitack Lim the IMO’s Secretary General has hit back saying that the composition of national delegations is a matter for the countries concerned and no denying that shipping bodies have any undue influence over the organisation.

In his statement issued yesterday Lim highlighted the representation of many areas saying…

“IMO currently has consultative arrangements with 77 NGOs. They include environmental groups, seafarer organisations, and groups representing classification societies, shipbuilders and owners of different types of ships. The range of NGOs represented at IMO rightfully covers the broad spectrum of shipping, maritime and social interests. These NGO’s are selected by the Member States based on their ability to substantially contribute to the work of the IMO through the provision of information, expert advice and representation of large groups whose activities have a direct bearing on the work of IMO. Participation of organisations representing so many different viewpoints provides a balance that adds considerably to the credibility of the Organisation’s overall output. This inclusiveness is one of IMO’s great strengths. “

In other carbon related developments, Danish MEP Bendt Bendtsen speaking about the latest attempts to reform the EU emission trading system for the period 2021-2030 said no agreement had been reached despite lengthy negotiations but he had called on the European Parliament to abandon its special requirements to include shipping which is to the detriment of European shipping companies and instead to support the work of the IMO.

The discussions over the next period of the ETS also included the issue of how to deal with UK issued credits following the departure of the UK from the EU. Concerns centre around the possible disposal of UK credits affecting the market price of carbon in the remaining 27 countries.

Followers of the Brexit negotiations will know that the EU is concerned over the effect on its future finances following the loss of one of the leading contributors to the EU’s coffers. An idea of how that shortfall might be made up was given in the Australian press this morning. It would appear that as trade negotiations between Australia and Europe begin in earnest, a large bloc within the European parliament is considering imposing a carbon tax on all imports.

The Progressive Alliance of Socialists and Democrats (S&D) – the second largest bloc within the 747-member parliament – wants a border carbon tax considered among other new revenue-raising ideas for the next EU budget from 2020.

Whether the idea will survive discussions remains to be seen but just as any levies on ships will need to be eventually passed on to consumers, so too would any carbon tax on imports. That could hit trade volumes which would impact shipping’s fragile recovery – especially if the idea is taken to its logical conclusion and imposed on all imports. Some might also consider it as a protectionist move by the EU which could result in retaliations around the globe.