Bloomberg News

China Among Nations Seeking Delays to Shipping-Emission Curbs

June 29, 2011

June 29 (Bloomberg) -- China, Saudi Arabia and South Africa want developing nations excluded from rules designed to cut the 870 million metric tons of carbon emitted by ships every year.

The United Nations’ International Maritime Organization meets from July 11 to set the emissions standards that may apply from 2013. Developing nations should either be exempt from those rules for five years or be assigned half the targets until 2021, the three countries said in a proposal last month to the IMO, a copy of which was obtained by Bloomberg.

International shipping accounts for about 2.7 percent of global emissions of carbon dioxide, making it the most efficient form of mass transport, the London-based IMO said in a report in 2009. About 90 percent of global trade moves by sea, the Round Table of International Shipping Associations estimates. Owners are considering liquefied natural gas as an alternative to the heavy fuel oil they currently use to power ships.

“What’s at stake is the ability of the IMO to regulate carbon,” said Simon Bennett, external affairs director for the London-based International Chamber of Shipping, whose members represent 80 percent of the global fleet. “If not adopted on a uniform basis, we stand to have chaos because you will have different standards applying to different ships depending on where they are registered.”

Lee Adamson, a London-based spokesman for the IMO, declined to comment.

Shipping Costs

The proposals to curb emissions would increase shipping costs as vessels are withdrawn from the fleet to be modified, said Mohammed al-Sabban, a senior economic adviser to Saudi Arabia’s oil minister and the lead negotiator for his country in climate talks. That in turn would raise the price of commodities, he said.

Li Guangling, an official at the maritime section of the Chinese embassy in London, confirmed the proposed amendments to the emissions rules and declined to comment further.

Making developing nations exempt would be in line with concessions made at United Nations climate talks in Japan in 2008, said Dumisani Ntuli, a South African representative to the IMO. That set out the principle of industrialized countries taking a greater responsibility for tackling emissions, he said.

The three countries’ proposal could apply either to all ships registered in developing nations or to ships owned by companies in such countries, Ntuli said. Developing nations would include those on the United Nations’ so-called non-Annex 1 list, he said. That includes Panama, Liberia and the Marshall Islands, the world’s three biggest ship registries.

Ship Registries

Of the 30 largest national ship registries tracked by Clarkson Research Services Ltd., a unit of the world’s largest shipbroker, 11 are on the UN’s non-Annex 1 list. Those 11 represent 667 million deadweight tons of shipping, or about 51 percent of the combined total across the 30 registries. Deadweight tons are a measure of carrying capacity.

The proposals from China, Saudi Arabia and South Africa could be applied to any ship registered in a developing country, said Bennett of the International Chamber of Shipping. Alternatives would include a voluntary system of compliance or member states barring ships with lower emissions standards from entering their ports, he said.

The IMO meeting next month is intended to create targets for new and existing ships for all 169 members, Bennett said. Failure to agree on global rules would complicate enforcement and may spur other bodies such as the European Union or another UN agency to set their own regulations, he said.

The IMO is discussing benchmarks for the design of new vessels through the Energy Efficiency Design Index and guidelines for reducing emissions through the Ship Energy Efficiency Management Plan. The precise targets have yet to be agreed on and compliance will be enforced by member states, South Africa’s Ntuli said.

International shipping emissions will likely increase by a factor of 2.2 to 3.1 over the next four decades if left unchecked, the United Nations Conference on Trade and Development said in a report in 2009.

--With assistance from Wael Mahdi in Dubai. Editors: Stuart Wallace, John Deane

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale in London at anightingal1@bloomberg.net


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