European Climate Change Programme WG Ships First meeting - Introduction DG CLIMA

1. European Climate Change Programme WG Ships First meeting - Introduction DG CLIMA Brussels, 8th and 9th February 2011 Mark Major European Commission DG Climate Action

2. 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

3. Necessary changes in emissions for staying below 2°C Global -50% < 1990 by 2050 Developed Countriesto cut by 80-95% < 1990 by 2050 Global peak for all emissions by 2020

4. Scale of emissions Doubling or tripling of emissions by 2050 IMO GHG Study 2009

5. Reductions measures = savings

6. 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

7. 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?

8. 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

9. 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.”

10. 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”

11. 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: clima-eccp-ships@ec.europa.eu • Written minutes - online (DG CLIMA)

12. 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.

13. 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

14. 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?groupID=2560

15. 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

16. 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

17. 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’.

18. 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

19. Win / win solution for maritime transport • Many GHG reductions will bring savings • Others at less than global carbon price (DNV, IMO, CE Delft) • Net benefit for society • Very high energy efficient mode • Impact on consumer price is low • No alternative • For majority of inter-continental freight • Cost pass through to consumers • Principle of polluter pays • Very marginal impact on demand • But winners / losers (within sector / consumers etc.)

20. Costs: Administrative burden Cost of equipment Impact on costs of goods Carbon leakage / competitiveness Benefits: Climate protection Demand for equipment/services Lower fuel costs Revenues for MS/sector Positive image of industry Cost and benefits Full and balanced discussion

21. EC policy process – preparation • 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

22. 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

23. Regional action • - 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

24. Global / European • Different preferences global / European • Different • Policy process • Legal framework • Institutions • Voting rules • Competitiveness / carbon leakage Different answer ?

25. Stimulate broader action • Broader action on shipping is necessary • Any European measures should stimulate / have positive impact on action by: • Sector • IMO • Other states

26. 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".

27. Thank you for your attention! Mark Major DG Climate Action European Commission B-1049 Brussels, Belgium mark.major@ec.europa.eu +32 2 295 0927

28. Scope of action Which gases? – CO², refrigerant gases? VOC, Black Carbon? Same scope all measures? – reduction commitments, monitoring?, reductionmeasures? 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?