By Jeff Coelho
LONDON (Reuters) - The International Maritime Organization will next week debate market-based measures to cut greenhouse gas emissions from ships, but the world's major shipping associations on Wednesday said the timing is not right for such measures to be applied.
While the IMO's Marine and Environment Protection Committee is not expected to reach any conclusions on market-based measures at a week-long meeting in London, the U.N. agency has been under pressure to tackle international shipping emissions.
The European Commission has threatened to take its own measures, such as including the shipping sector in its emissions trading scheme, if a solution to control rising shipping emissions by the IMO is not strong enough.
Some of the carbon-cutting measures under IMO review include a contribution or levy on all carbon dioxide emissions from international shipping, an emissions trading system and schemes based on the operational and design efficiency of ships.
But the so-called round table (RT) of leading shipping associations urged the IMO to postpone the introduction of market based measures and to instead focus on implementing mandatory energy efficiency design standards adopted last year.
"The RT is of the view that market based measures are not justified at this particular time," said a joint statement from BIMCO, INTERCARGO, INTERTANKO and International Chamber of Shipping.
Last July, forty-eight countries voted in favor of adopting a mandatory energy efficiency design index for new ships and a voluntary energy efficiency management plan for all ships.
"Let's press on with the (energy efficiency measures) and let's see what we can achieve," a spokesman for INTERTANKO told Reuters.
Of the different market proposals, the round table statement said the group was most opposed to an emissions trading scheme. "The very complexity of international seaborne trade renders the concept of ETS unworkable for the shipping industry," it said.
EU Climate Commissioner Connie Hedegaard has said the 27-nation bloc's preference is for shipping emissions to be tackled by the IMO, although the EU would be ready to act if the U.N. agency failed to deliver.
The Commission also said the UN's International Civil Aviation Organization (ICAO) would be the best forum for a global solution on aviation emissions, but the EU executive ran out of patience and included the sector into its emissions trading scheme.
Since the start of the year, all airlines using EU airports are obliged to take part in the scheme, which puts the cost of CO2 emissions on their balance sheets.
The move has raised the prospect of the world's first carbon trade war, as countries opposed to the EU law agreed on a basket of retaliatory measures.
The aviation clash over the EU scheme may give some breathing room for the IMO.
"I expect them (the European Commission) to verbally continue to put pressure on IMO, but I would be very much surprised if the Commission floats a proposal when the dust on the aviation ETS has not settled down," said an aviation and maritime research analyst who asked not be named.
At the same time, he said the IMO's MEPC is likely to postpone a decision on market-based mechanisms until the impacts on developing countries are more clear, which will be July next year at the soonest.
A Commission spokeswoman said the executive recently started a public consultation on four policy options for shipping, including a compensation fund, an emissions trading system, a fuel or carbon tax and a mandatory emission reduction per ship.
The public consultation is open until April 12.
(Additional reporting by Barbara Lewis in Brussels)