ASA strongly opposes EU-ETS but supported the adoption of an International Maritime Research Fund through levy-based system on Marine Fuel for Shipping









As matter of principle, the Asian Shipowners’ Association (ASA) strongly
opposes any proposal for the unilateral or regional regulation of
international shipping that may undermine the authority of International
Maritime Organisation (IMO), which has been given responsibility by
UNFCCC Parties for regulating the reduction of international shipping’s
GHG emissions, as these emissions cannot be attributed to individual
national economies.


As the industry’s global regulator, IMO is the only appropriate forum for
the development of a market-based measure (MBM) applicable to
international shipping – this is a position shared by most IMO Member
States. In this regard, the development of a global MBM is already
included as a mid-term candidate measure under IMO’s Initial Strategy.


As such, the ASA Safe Navigation and Environment Committee (SNEC)
is very concerned that the inclusion of shipping in the EU ETS is being
taken forward with little apparent understanding of the implications for the
ongoing negotiations at IMO to eliminate GHG emissions from the sector
globally, or the wider ramifications for the EU’s relationships with its
trading partners.


In particular, as representatives of Asian shipowners, the ASA is
concerned that the application of the EU ETS to non-EU flag ships is
essentially an extraterritorial tax when the EU needs to encourage global
trade, not create new barriers. Furthermore, ASA is concerned that, if the
EU goes ahead with this extraterritorial approach, other nations around
the world might feel entitled to emulate this unwelcome precedent,
applying their own ‘carbon charges’ to international voyages, which
originate or terminate at ports outside their territory, creating chaos and
fragmentation of the global maritime regulatory framework.


Rather than incentivising the transition to zero-carbon technologies, the
extension of the EU ETS to shipping will only serve to impede the process
of decarbonisation of international shipping, putting the EU in conflict with
the achievement of both IMO and UNFCCC climate change objectives, as
the incorporation of shipping into the EU ETS will have profound
implications for the future authority of IMO. This could potentially derail
the concerted efforts by all IMO Member States, including European
nations, to eliminate CO2 emissions from shipping completely.


For our part, the preference of the ASA SNEC would be for the adoption
of an International Maritime Research Fund to drive innovation, paid for
by a mandatory contribution on fuel used by ships, into technology the
industry needs to cut carbon emissions by 50% in 2050 and ultimately
eliminate those emissions, supported by a levy-based system linked to
fuel consumption/CO2 emissions, as this is the form of MBM which the
shipping industry has determined will be least likely to create unfair
competition or distortion of global shipping markets.


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