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EU “Fit for 55” package ineffective, believes Cyprus Chamber of Shipping

04 Aug 2021

The European Union (EU) package to decarbonise shipping will simply not prove effective, believes the Cyprus Chamber of Shipping. The “Fit for 55” package is a set of proposals to revise and update EU legislation in an effort to reduce greenhouse emissions by 55% by 2030, it said in a Friday (30 July) statement.

The chamber acknowledges the need for action to face the climate crisis but contends the EC package may prove ineffective, greatly impact European shipowners and undermine global efforts to meet required environmental objectives.

Further, the chamber contends inclusion of shipping in the EU ETS — a revision of the EU emissions trading system (EU ETS), including its extension to shipping — and the FuelEU Maritime proposals – which aim to increase the use of sustainable alternative fuels in European shipping and ports — in the package do not ensure absolute emissions reductions will be achieved.

“The decarbonisation of the shipping industry is a global and not a regional challenge and as a regional market-based measure, the EU ETS will seriously undermine the ongoing international efforts and negotiations at Imo towards the sector’s decarbonisation.

The very complex characteristics of the shipping industry, with numerous ship types, trades, contractual relationships and stakeholders involved, make the ETS with a fluctuating carbon price, a system that will negatively impact the many small and medium sized shipowners who form the backbone of European shipping.

Furthermore, generated revenues should support the sector’s energy transition. It is important that revenues from the ETS should be used to support investment in research and development as it is acknowledged by all that decarbonisation will only be possible with the development of fuels and technologies that do not currently exist.

It should also be recognised that shipping’s decarbonisation should not fall solely on the shoulders of the shipowners, but it should be a collective effort by all stakeholders involved in the maritime transportation supply chain such as the charterers, cargo owners, fuel suppliers, engine manufacturers, ship builders and ports.”

As regards the FuelEU regulation, which aims to promote the market uptake of cleaner fuels currently not commercially available, The Chamber says that it introduces an extra administrative burden in addition to the Measuring, Reporting and Verification (MRV) systems which, since 2007, has had the role of exchange between climate negotiators, policymakers and. practitioners from more than 40 developing, emerging and developed countries.

“In addition to the MRV system, shipping companies will be subjected to a whole new separate system of reporting and verification of the carbon intensity of the fuels used onboard. This coupled with penalties for those companies that fail to meet the targets due to no fault of their own but due to the unavailability of specified fuels will further and unfairly burden the shipping industry,” the Chamber pointed out.

Finally, the FuelEU regulation, rather than imposing a fuel mandate on fuel suppliers, as is the case with other modes of transport, unfairly targets the ship operators, who cannot be held responsible for either the quality or the availability of specified fuels, according to the Cyprus Chamber of Shipping.

“The Chamber looks forward to working with the Cyprus flag, the European Parliament, the European Commission and other stakeholders in order to achieve the adoption of a pragmatic and realistic approach through the proposals.”

Various associations and shipping firms have expressed thoughts of the EU “Fit for 55” package; a collection of earlier statements from these entities can be found below:

Related: IBIA: Fuel EU Maritime, EU ETS and bunker tax proposals raise many questions
Related: Bio-LNG bunkering project ‘FirstBio2Shipping’ receives Fit for 55 Package EU funding
Related: Union of Greek Shipowners welcomes EC “Fit for 55 Package”; questions effectiveness
Related: SEA-LNG responds to the European Commission’s “Fit for 55” package
Related: It’s time for greater decarbonisation action: GoodFuels’ response to ‘Fit for 55’
Related: Maersk: Charting the course to a climate-neutral Europe and sustainable shipping
Related: ECSA: EC “Fit for 55” package offers lack of consistency among other climate proposals
Related: T&E: Still time to rectify ‘disastrous’ EU shipping policy


Photo credit: Guillaume Périgois on Unsplash
Source: Cyprus Chamber of Shipping
Published: 4 August, 2021

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