Europe Could Send Ships' Air Pollution to Market

BRUSSELS, Belgium, September 8, 2003 (ENS) - The European Union could introduce one or even a series of market based measures to control air pollution from shipping. The European Commission has asked a consultancy to suggest promising plans by January. Possible options were discussed on Thursday and Friday at a stakeholder workshop in Brussels.

The new focus on economic instruments comes as legislative debate continues over European Commission proposals issued in 2002 to tighten permissable ship fuel sulfur levels in pollution sensitive areas.

Sulfur emissions have an impact on human health and contribute to acid rain which harms the environment, particularly fresh water ecosystems.

In August, the European Commission rebuffed attempts by Members of the European Parliament to achieve much deeper cuts in allowable sulfur dioxide emissions from ships under a law on marine fuel quality proposed in November 2002. The Commission described as "premature" the assembly's proposal to reduce maximum fuel sulfur content to 0.5 percent throughout all EU waters by 2012.


Brittany Ferries' Duc de Normandie leaves Portsmouth Harbour trailing a black cloud of smoke. (Photo courtesy FreeFoto)
Shipping industry interests have called for economic instruments to be introduced instead of legislative sulfur curbs. The Commission has rejected this, though the European Parliament has accepted that such approaches could be used to achieve an envisioned second round of pollution cuts.

NERA Economic Consulting, an international firm of economists, has now been asked to suggest appropriate economic instruments for cutting air pollution from ships. Possible candidates were discussed at last week's workshop.

Sweden's shipowners' association is proposing an ambitious cap-and-trade program for both sea and land emissions of sulfur dioxide and nitrogen oxides. This would cover not only all ships entering EU waters but also all land based sources regulated by the integrated pollution prevention and control law.

Participation by ships would be voluntary, but since their abatement costs are lower they would have strong incentives to cut emissions and sell the credits to installations on land. The idea would demand amendments to several major EU laws, however, and received a cool reception from policymakers at the workshop.

Another proposal is an emissions trading scheme called "offsetting," proposed by a consortium of ship owners and fuel producers named Shipping Emissions Abatement and Trading (SEAaT). Under it, some ships would install abatement technology cutting emissions well below levels required by law. These credits would be transferrable to vessels without the technology.

Speaking at the workshop, Reidar Stockleth of SEAaT insisted that regulation based on a sulfur cap only would be "inefficient for the environment and industry." Trading would instead bring certainty to a European Union debate that is "turbulent and full of confusion," he said.

Other options expected to be considered by Nera are differentiated charges for entering national waters or ports depending on a vessel's environmental profile, plus a version of kilometer charging for ships.

Though these could be directed at cutting other types of pollution, all are subject to various difficulties and look less likely than emissions trading to get off the ground.

Any new EU legislation that might result would probably emerge by 2005 through the Clean Air for Europe program, the Commission's thematic strategy on air quality.


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