Transcript Economic Analysis of EU-wide Emissions Trading of CO2

European Climate Change Programme
WG Ships
First meeting - Introduction
DG CLIMA
Brussels, 8th and 9th February 2011
Mark Major
European Commission
DG Climate Action
European Commission: 1
EU Climate Change policy

The European Council has made a firm commitment to reduce the
overall greenhouse gas emissions of the Community by at least 20%
below 1990 levels by 2020, and by 30% provided that other developed
countries commit themselves to comparable emission reductions

The European Council supports reductions, by developed countries as a
group, of 80-95% below 1990 levels by 2050.

These reductions are required to have any chance of meeting
stabilisation goals to limit global temperature rise to an average of +2°C

Such reductions will require all sectors to play their part but will require
power generation and transport sectors to decarbonise
European Commission: 2
Necessary changes in emissions for
staying below 2°C
Global -50%
< 1990 by 2050
Global peak for all
emissions by 2020
Developed
Countries
to cut by 80-95%
< 1990 by 2050
European Commission: 3
Scale of emissions
Doubling or tripling
of emissions by
2050
IMO GHG Study 2009
CO2 emissions from ships (million tons CO2 / yr) '
Scenarios for CO2 emissions from International Shipping
from 2007 to 2050 in the absence of climate policies
8000
7000
6000
5000
A1FI
A1B
A1T
A2
B1
B2
Max
4000
Min
3000
2000
1000
0
2000
2010
2020
2030
2040
2050
European Commission: 4
Reductions measures = savings
European Commission: 5
Global action - difficult to progress - IMO

Full EC/EU support to global measures
developed through IMO
 No
global baseline / target
 no agreement on mandatory measures
 EEDI could deliver – 20% from BAU by 2030
(+ 100% from 2010 levels)
 Political problem - not technical
European Commission: 6
Global action - difficult to progress - UNFCCC
EU position
 Maritime emissions should be included in a post 2012 agreement
 All Parties should take action
 Clear and meaningful targets / -20% compared to 2005 by 2020.
 IMO / ICAO should agree measures in 2011
 Revenue from a global MBI could be used to tackle climate change in
Developing Countries



Little support in UNFCCC for targets
Climate financing will be required – maritime is
one option
Who does what / when?
European Commission: 7
EU Legislation – 5th June 2009

Unless IMO / UNFCCC measures have been approved by the 27
Member States by 31 December 2011, the Commission should make
a proposal.

Measures should enter into force by 2013.

Such proposal should minimise any negative impact on EU
competitiveness, taking into account the potential environmental
benefits

EU Legislation - agreed by the Council (27 EU states) and European
Parliament
European Commission: 8
Decision 406/2009/EC (ESD) and
Directive 2003/87/EC (ETS Review)

Recitals:
“In the event that no international agreement which includes
international maritime emissions in its reduction targets through the
International Maritime Organisation has been approved by the
Member States or no such agreement through the UNFCCC has
been approved by the Community by 31 December 2011, the
Commission should make a proposal to include international
maritime emissions in the Community reduction commitment with
the aim of the proposed act entering into force by 2013. Such a
proposal should minimise any negative impact on the Community’s
competitiveness while taking into account the potential
environmental benefits.”
European Commission: 9
ECCP – WG Ships

European Climate Change Programme
 Used
since 2000 to develop European Climate Change
policies
 http://ec.europa.eu/clima/policies/eccp/index_en.htm

ECCP WG Ships - Objective
“Provide input to the Commission in its work to develop
and assess options for the inclusion of international
maritime transport in the EU's greenhouse gas reduction
commitment”
European Commission: 10
ECCP – WG Ships - Process





Three meetings (2 days each) = 6 days – can be changed
COM has provided provisional list of topics (after
consultation of the MS in CCC) – can be changed
Documents – online (DG CLIMA)
Participants public – online (Sec. Gen)
Written submissions / positions to:
[email protected]

Written minutes - online (DG CLIMA)
European Commission: 11
ECCP – process

Background documents prepare by COM
 to help indicate useful areas for discussion.

Stakeholder should raise all relevant issues /
concerns / views during the meetings (timing
flexible)
 Useful
to expand on what is possible and what
is NOT possible.
European Commission: 12
Policy options

No European Commission preference at this
stage
All options are open

For example:

IMO / UNFCCC / own initiative
 Commitments / reporting / reductions measures
 Technical / operational / market based
 Timing

European Commission: 13
High Level Panel – ships/GHG

Joint initiative of:





Vice President KALLAS (DG MOVE) and
Commissioner HEDEGAARD (DG CLIMA)
Invitation only – 24 participants
Shipping industry, cargo owners, MEP’s, States,
NGO’s and academics
Details online:
http://ec.europa.eu/transparency/regexpert/detailGroup.cfm?groupI
D=2560
European Commission: 14
High Level Panel – ships/GHG

Purpose:





Consider progress in IMO and UNFCCC
What should be done in respect of the EU's commitment's on
taking responsibility for maritime emissions
Policy action benefit the shipping industry
Strategic and political analysis (not technical issues)
In parallel to formal broad stakeholder consultations
European Commission: 15
High Level Panel – ships/GHG


First meeting held 3rd February
Discussions







Preference for global measures – but recognise need for action
Lack of urgency in IMO process
How to get IMO / UNFCCC to deliver
EU needs to work together – but also needs to convince key allies
Link action on ships to globally agreed 2°C objective
Second meeting foreseen after MBM Intersessional (e.g.
April/May 2011)
Third meeting after IMO MEPC 62
European Commission: 16
Challenge - Political problem not
technical




Consensus that a broad range of known
technical, operational and market based
measures are available / possible.
Lack of progress is a political not technical
problem
Not depending on future research and
innovation – although that should deliver more
Many technologies / processes / services are
‘European’.
European Commission: 17
Problems with lack of progress

Impact – causing dangerous climate change

Cost – whatever target is agreed, starting late costs more (mitigation and
adaptation)

Fairness - other sectors reducing for years

Uncertainty – which investments? what services? what equipment

Image – CO2 emissions from aviation capped below 2005 levels from
2012

Loss of influence – not defining / influencing the debate
European Commission: 18
Win / win solution for maritime transport

Many GHG reductions will bring savings



Very high energy efficient mode



For majority of inter-continental freight
Cost pass through to consumers


Impact on consumer price is low
No alternative


Others at less than global carbon price (DNV, IMO, CE Delft)
Net benefit for society
Principle of polluter pays
Very marginal impact on demand
But winners / losers (within sector / consumers etc.)
European Commission: 19
Cost and benefits

Costs:



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Administrative burden
Cost of equipment
Impact on costs of goods
Carbon leakage /
competitiveness

Benefits:



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Climate protection
Demand for
equipment/services
Lower fuel costs
Revenues for MS/sector
Positive image of industry
Full and balanced discussion
European Commission: 20
EC policy process – preparation



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Stakeholder consultation on issues – 2011
Impact Assessment work – 2011/2012
Commission decision on measures
(IMO/UNFCCC/own initiative) – early 2012
Legal text / translations – early 2012
Legislative proposal 2012
European Commission: 21
EC policy process – negotiation
Commission proposal in 2012
 Co-decision 2013/2014 – (European Parliament

and Council (27 MS) work takes place on basis of
Commission proposal, often several years' discussion)
Entry into force
 Implementation / preparation 2015-2016
 Earliest feasible date for full application 2017

European Commission: 22
Regional action



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- Less emissions
- Border effects
+ Institutions / decision making rules in
place
+ Faster to agree and enter into force
+ More likely to focus on enhancing
regional competitiveness
European Commission: 23
Global / European

Different preferences global / European

Different
 Policy process
 Legal framework
 Institutions
 Voting rules
 Competitiveness / carbon leakage
Different answer ?
European Commission: 24
Stimulate broader action
Broader action on shipping is necessary
 Any European measures should stimulate
/ have positive impact on action by:



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Sector
IMO
Other states
European Commission: 25
Specific studies

Study conducted for the European Commission by a
consortia, lead by CE Delft, on the most feasible EU
policy options to reduce international maritime GHG
emissions titled: "Technical support for European action
to reduce Greenhouse Gas Emissions from international
maritime transport" (2009)

Study made by the Federal Environment Agency of
Germany, which assesses three options for integrating
international ocean shipping into the EU ETS titled:
"Integration of Marine Transport into the European
Emissions Trading System".
European Commission: 26
Thank you for your attention!
Mark Major
DG Climate Action
European Commission
B-1049
Brussels, Belgium
[email protected]
+32 2 295 0927
European Commission: 27
Scope of action
Which gases? – CO², refrigerant gases? VOC, Black Carbon?
 Same scope all measures? – reduction commitments,

monitoring?, reduction measures?

Which ships? – all > 400 GT / 20,000 GT, certain categories?
Exemptions? Phase in?

Which emissions? – intra EEA voyages? all incoming
voyages? Last x months?

Which actors? – all ships visiting EEA ports? Flag? Manager?
Owner? EU Member State?
European Commission: 28