Shipping wants assurance that money raised by a bunker levy will benefit the environment
The shipping industry prefers a bunker levy system under the auspices of theInternational Maritime Organization (IMO)and funds raised should only be used for environmental benefits, the International Shipping Conference heard on Wednesday.
But the industry has not welcomed a recent proposal to introduce a $25 per tonne levy on bunker fuel to help reduce greenhouse gas (GHG) emissions from shipping and help developing countries finance programmes combating climate change.
The World Wide Fund for Nature (WWF)and Oxfam urged negotiators at the upcomingUnited Nations Framework Convention on Climate Change (UNFCCC) talks in Durban, South Africa, to adopt the measure.
They said a $25 bunker levy could raise some $25 billion annually with at least $10 billion a year for the $100 billion Green Climate Fund (GCF) agreed at UNFCCC talks in Mexico last year. Parts of the funds raised would be used to compensate developing countries for the increase in import costs that would result from it.
Revenues raised from an MBM should go back to the shipping industry to spur more innovations to further reduce emissions, Sturla Henriksen, Director General of the Norwegian Shipowners Association (NSA) told the conference. He said there was “no doubt that only the IMO” should deal with GHG regulations for shipping.
The NSA last year changed its position on MBMs to state a preference for a bunker levy rather than an emissions trading scheme (ETS), which is also the position of the International Chamber of Shipping (ICS).
Henriksen said the ICS position on MBMs was crucial as ICS was “the only representative body of the international shipping community”, suggesting it reflected the majority view.
During a Q&A at the conference, ICS Chairman Spyros Polemis expressed some of the industry’s concerns about a UNFCCC agreement to raise funds by putting a levy on bunkers.
“Will there be transparency so we can see that money raised from shipping will be used for for environmental benefit?,” he asked. He mentioned fears that the levy would line the pockets of “big companies” involved in administering it or governments that may not be held accountable for how the money are spent.
ICS external affairs chief Simon Bennett recently explained similar fears about the WWF and Oxfam proposal.
“This will only encourage those governments that would like to keep the money for themselves, rather than using it to help developing countries improve the environment,” he told Fairplay last week.
Bennett explained why ICS, despite supporting a bunker levy approach, had reservations about the WWF and Oxfam proposal.
“We believe such a mechanism must be developed at IMO so that it applies to all ships, not just those of developed countries, which will be the more likely result if the details are developed by UNFCCC,” he was quoted saying.
He also stressed that if the IMO develops a funding mechanism tied to fuel consumption, most of the proceeds “should be sent to environmental projects”.
In line with other shipping organisations, Bennett said shipping should not be expected to contribute funds above and beyond its share of global carbon emissions.
Last week, David Balston from the UK Chamber of Shipping objected to the WWF and Oxfam proposal because it expected shipping to fund 10% of the $100 billion the Green Climate Fund, which he said was disproportionate.
Unni Einemo, London News Desk, 16th September 2011 12:25 GMT