Emissions Trading for Shipping

Emissions trading can provide the shipping community with the flexibility to reduce emissions in a cost effective way without sacrificing environmental objectives.

SEAaT recommends to industry groups and legislators that emissions trading schemes be encouraged and developed for shipping.

Emissions trading of SOx and NOx has been a critical component of successful implementation of environmental legislation in a number of industries. Shipping can benefit from their experiences, and construct a scheme that will demonstrate the industry’s capability to solve environmental issues without prescriptive regulations that may inhibit competitiveness.

SEAaT is working for the inclusion of emissions trading as a form of compliance with international and regional laws, giving ship owners the flexibility to reduce emissions and improve air quality at the lowest cost to society.

SEAaT is participating in projects and simulations to explore the viability and benefits of emissions trading for shipping.

Summary

Recent experience across many forms of progressive legislation in Europe and around the world has shown that including market based mechanisms as part of the regulatory framework has increased compliance and accelerated the achievement of environmental improvement targets.

The successful development of abatement technologies creates a solid basis for emissions trading. Encouraging the trading of credits generated from the substantial reduction of emissions through on-board abatement would lower the cost to society of improving air quality.

The benefits that may be achieved by the use of market instruments was reviewed for the European Commission in the NERA Report, which recommended further exploration of a number of emissions trading schemes for shipping. The inclusion of both aviation and shipping industries in the EU Emissions Trading Scheme for greenhouse gases has been proposed by a number of EU Member States, and the shipping industry wishes to begin learning about how emissions trading may be adapted for use in this diverse, global transport mode.

However, both existing and proposed legislation for shipping does not yet endorse emissions trading as a means of reducing emissions from shipping activities.

SEAaT encourages legislators to consider the adoption of amendments to laws which enable practical trials of emissions trading for shipping to begin, along with the ongoing use of market based instruments that prove environmentally successful and cost effective.

In this way, the shipping community can begin to develop an appropriate position on the possible benefits and challenges of emissions trading schemes for shipping. Without the ability to conduct practical trials, measures which could assist in achieving the environmental objective of lower emissions could be delayed.

We sometimes encounter the idea that market based mechanisms for improving environmental performance in the shipping sector is premature. However, the shipping industry is ready to take a proactive approach to emissions reduction, and wishes to use the same methods that have been successful for other industries.