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January 20 2020

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22 The Journal of Commerce | Januar y 20 2020 www.joc.com International Maritime SHIPPING'S LONG-RUNNING CAMPAIGN to remain outside Europe's emissions trading system (ETS) and continue regulating itself received a blow in December as the European Green Deal was unveiled in Brussels. European Commission president Ursula von der Leyen said the new climate policy to make the EU a net-zero carbon economy by 2050 would include a proposal to bring shipping into the ETS. Inclusion in the system would make it mandatory for the industry to monitor, verify, and report its emissions. European non-governmental research and climate campaign orga - nization Transport & Environment (T&E) welcomed the commission's decision to address issues surround- ing aviation and shipping, calling the transport sectors "the biggest climate laggards," and noting that shipping was "the only sector of the economy that has so far escaped climate action." "Of course, this is just a declara- tion of intent. The devil will be in the details of the new laws and whether EU governments support the Green Deal, but it is a good start," T&E said in a statement. If approved by the European parliament, the Green Deal and its proposals will become part of a March 2020 draft of the wider European Climate Law, and that would be followed by deliberations on how to achieve 2030 CO ₂ emissions targets the Green Deal wants increased from 40 percent to between 50 and 55 percent of 1990 levels. However, shipping firms insists they remain excluded from the EU ETS, preferring to continue with the International Maritime Organiza- tion's (IMO) mandatory Data Col- lection System (DCS) on global fuel consumption. The DCS, which began on Jan. 1, 2019, is intended to be the first step in a process of collecting and analyzing global emission data related to the shipping industry. A spokesperson for the Global Maritime Forum, a not-for-profit organization focusing on global ocean trade, told The Journal of Commerce that at the end of each year, DCS data will be submitted to a recognized organization or a flag state, where it will be verified in accordance with IMO regulations. Every year from May 2020 onward, a DCS statement of compli - ance will be issued to shipowners, and the data will become part of the IMO Ship Fuel Oil Consumption Database. Maritime 'green fund' With regulators circling, global shipping has also proposed a volun- tary tax on itself to establish a fund focusing on decarbonization efforts. At the recent Global Maritime Forum Annual Summit in Singa- pore, BW Group chairman Andreas Sohmen-Pao said a carbon levy was necessary for international shipping to be able to meet the challenge of decarbonization. "We have an opportunity to shape a new maritime future, create a new business opportunity, and drive innovation," Sohmen-Pao said. "A maritime green fund could accelerate decarbonization in shipping, support scaling and infrastructure to deliver new fuels, while taking into con- sideration the impact on trade and developing states." A working group at the Singa- pore event even put numbers to the maritime green fund. Most felt that the starting level for a carbon levy should be $10 per ton of CO ₂ , and $50 to $75 per ton by 2030. It was estimated that a price of $10 per ton of CO ₂ could add about $8 billion to the fund annually, while $75 per ton fee would generate $70 billion a year. While shipping discusses how best to meet tough European emissions targets, not helping its attempts at self-regulation is a perception that the online CO ₂ calculators provided by carriers are deeply flawed and have no relevance to shippers looking to mea- sure emissions on a particular trade. A report from analyst Sea- Intelligence Maritime Consulting in early December described the online CO ₂ calculators provided by 10 of the world's top 15 container shipping companies as being completely useless. Alan Murphy, CEO of Sea- Intelligence, strongly recommend carriers "take these deranged mutant monstrosities of error and incompe - tence offline as soon as possible." Also in December, the world's second-largest carrier, Mediterranean Shipping Co. (MSC), was called out as the largest emitter of CO ₂ among shipping lines in the EU by T&E, which reviewed data from the EU monitoring, reporting, and verification (MRV) regu- lation that requires ships to report their CO ₂ emissions associated with journeys to and from the EU. The in-house T&E analysis, which pegged MSC as Europe's eighth-worst polluter, drew a swift response from the carrier, which said the raw data used in the report reflected its leading position in volume terms in Europe, and should be viewed in the context of the amount of cargo it carries. "MSC transports 21 million con- tainers annually, and the ratio of CO ₂ emissions per ton of cargo we move is among the lowest in the industry," the carrier said. Lars Jensen, Sea-Intelligence Con- sulting CEO, sprang to the defense of MSC, calling the analysis flawed and misleading in that it completely dis- regarded operational realities across shipping lines. JOC email: greg.knowler@ihsmarkit.com twitter: @greg_knowler "The devil will be in the details of the new laws… but it is a good start." In or out? Europe's Green Deal planners want shipping included in emissions trading By Greg Knowler

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