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EU extension of ETS to shipping will fund post-Covid recovery, warns ICS

Photo: ICS Esben-photo.jpg
Esben Poulsson
The EU’s plans to extend its Emissions Trading Scheme (ETS) to shipping could undermine industry efforts to set up a decarbonisation R&D fund through the IMO, says Esben Poulsson, chairman of the International Chamber of Shipping (ICS).

Last year, the ICS and other industry bodies, proposed setting up a $5bn R&D fund under the IMO to research zero carbon fuels and technologies for shipping, with owners paying $2 per tonne bunker fuel levy.

Speaking to the Seatrade Maritime Awards International event, co-organised by Shanghai International Port Group (SIPG), Poulsson said: “The intention of this catalytic proposal is to enable the shipping industry to decarbonise completely in line with ambitious CO2 reduction targets agreed by IMO. This is an innovate proposal that requires the support of IMO member states to ensure that we can deliver a sustainable and equitable future for our industry.”

The EU, and others, has been unhappy about the pace of IMO in agreeing future plans to reduce CO2 emissions, and is moving to extend its ETS scheme by 1 January 2022.

Poulsson warned, “However, progress at the IMO could be seriously undermined if the European Union presses ahead with a unilateral proposal to extend its Emissions Trading Scheme to international shipping, including non-EU ships with the intention of raising billions of Euros to support the EU’s post Covid recovery.”

He said that EU trading partners would, “no doubt view this unwelcome initiative as an extra-territorial tax on trade”.

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