LISCR Opposes EU Emissions Trading Scheme

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Liberia has the second largest shipping registry in the world, next to Panama

Says tax implications “would have a particularly disproportionate effect on developing countries, an issue which is a key concern to Liberia

The Liberian Shipping and Corporate Registry (LISCR) has announced its opposition to the recent proposal from the European Union Parliament on the implementation of a separate, unilateral set of regulations, in the instance of the Emissions Trading System (ETS) scheme for international shipping.

The Liberian Registry comprises more than 4,400 vessels aggregating over 170 million gross tons, representing 12 percent of the world’s ocean-going fleet. Liberia has earned international respect for its dedication to flagging the world’s safest and most secure vessels, according to LISCR’s website.

Alfonso Castillero, Chief Operating Officer of the Liberian International Ship and Corporate Registry (LISCR), says: “We understand the need for efforts to lower greenhouse gas emissions and continue to push for a cleaner environment, as well as a more efficient maritime industry.  However, at least for international shipping, it is vital we work toward one set of requirements established by the International Maritime Organization (IMO), avoiding the creation of a fractured system of regional requirements that reach beyond their own waters, and assuring a unified global effort to confront this important issue.

According to the EU, International shipping is a large and growing source of greenhouse gas emissions and requires swift mitigation measures.

“Maritime transport emits around 940 million tonnes of CO2 annually and is responsible for about 2.5% of global greenhouse gas (GHG) emissions,” the EU says, quoting the 3rd IMO GHG study. “These emissions are projected to increase significantly if mitigation measures are not put in place swiftly. According to the 3rd IMO GHG study, shipping emissions could under a business-as-usual scenario increase between 50% and 250% by 2050, undermining the objectives of the Paris Agreement.”

Justifying its bold move, the EU notes that although a global approach to address GHG emissions from international shipping, led by the International Maritime Organisation (IMO), would be the most effective and thus preferable, the relatively slow progress in the IMO has triggered the EU to take action.

But, according to Castillero, “The EU ETS scheme, if implemented, should be applicable only to those waters of EU members, and not become a global scheme. The EU ETS scheme, if applied extraterritorially beyond intra-EU voyages, will distort the global market situation because it will cover voyages not only within the EU, but also voyages to and from the EU as agreed by the EU Parliament.  Like many other IMO member states, we remain committed to working with the EU on a collaborative effort to address the environmental challenges posed by greenhouse gas emissions.”

According to LISCR, Liberia agrees with the recent World Shipping Council (WSC) position that a unilateral EU ETS scheme would undermine efforts to reduce global greenhouse gas emissions currently underway, including the proposal by a broad coalition of industry associations to the IMO for the establishment of an International Maritime Research and Development Board, funded by the industry, to accelerate the introduction of low-carbon and zero-carbon technologies and fuels for shipping. 

Their paper highlighted the serious concerns around maritime emissions’ reduction if the EU expands its ETS to include international shipping.

Alfonso Castillero, chief operating officer, LISCR

“The most-discussed geographic application of the EU ETS (that has now been agreed by the EU Parliament) is to mirror the scope of existing EU legislation on Monitoring, Reporting and Verification (MRV) of carbon emissions,” Castillero says. “While the EU ETS has been described as a ‘regional’ system, bringing international shipping into that system using the MRV scope would, in effect, regulate the operation of ships on several of the world’s seas and oceans, including on the high seas and in waters adjacent to non-EU nations.”

In a statement, the Secretary General of the European Community Shipowners’ Association (ECSA), Patrick Verhoeven, says “Putting unrealistic pressure on IMO with regional measures that will gravely hurt a global sector and do very little for climate is not the way to proceed. It will unduly complicate the achievement of an effective and timely global agreement in IMO that everyone in the end wants. We thank those [Members of the European Parliament] that voted against the inclusion of shipping and hope this spirit will prevail in the upcoming trilogue negotiations.”

The 2019 EU Annual Report on CO2 Emissions, found that within Europe, shipping transports 75% of EU’s external trade, yet only accounted for 3.7% of emissions. However, in 2015, the EU’s shipping emissions represented around 13% of the overall EU greenhouse gas emissions from the transport sector. Maritime transport should continue to play a key role in a European climate neutral economy. In their report’s own words: “Waterborne transport is already one of the most energy-efficient modes of transport available.” 

LISCR stresses that it needs to be fully understood that taxation costs incurred from an ETS will be distributed to the supply and value chains, which will have a genuine impact on the costs of ocean transport.  If the EU were to apply its ETS to shipping using the same geographic scope as the EU’s existing MRV regulation, the effect would be to apply a financial charge on voyages that in some cases stretch halfway around the world.  Over half of the covered emissions would result from voyages outside of EU waters. As part of the application to voyages into and out of EU ports, if the ETS provisions were to follow the MRV scope they would also apply to emissions associated with cargoes that are transshipped through the EU, but that are not EU imports or exports.  This would have a particularly disproportionate effect on developing countries, an issue which is a key concern to Liberia.  This opens up the very real prospect of trade and tax retaliation on a global scale.

In addition to adding cost and complexity to international shipping, the application of one or more national or regional carbon pricing mechanisms, as already mentioned, would entrench such unilateral measures, making it more difficult to reach a uniform, effective, and global solution through the IMO.

Liberia echoes its support for the IMO to continue to push forward its decarbonization goals, and safely navigate the regulations resulting from them.

6 COMMENTS

  1. Reference climate change, taking a nod from the U.S stance of anti-reduction of greenhouse gases would be a monumental mistake. Granted that Liberia benefits bigly from maritime funds, longterm environmental costs to our long stretches of coastal cities should the EU requests are ignored should be compared to whatever short term financial cost. All we need to do in order to take climate change seriously, is look at the rapid pace by which the ocean reclaiming Bushrod Island. A century or less from now, it will be under the sea. Perhaps, the question is, if we can’t share resources of our country with other Liberians, how can we conserve or sacrifice for posterity?

  2. You are so right, Mr. SGM. This is slowly becoming a reality and one has only to go to Buchanan to realize the magnitude of the situation.

    I shudder for my nine year old son.

  3. Ha ha ha ha ha ha ha ha h ha ha ha ha ! The regime wants the funds, and has even appointed an EPA Czar to handle the incoming promised funds of almost one hundred million US dollars. And the regime’s refusal to go along with the climate change movement may jeopardized how much of that fund will be forthcoming. Now is the time the former Professor of the University of Liberia, Professor Wilson Tarpeh to start strategizing to engage the regime in a serious conversation. And not sit around again as was done when the regime had to purchase gasoline from neighboring Sierra Leone. That was went oil was selling on the free market for almost 27 USD per barrel. Can’t sit around again and outsourced his reputation and responsibility to the people at the Maritime Authority to handle issues of climate change.
    But then again, what does the poor Professor knows about the science of climate change to put forward a strong debate on the issues being put forward by the European Union.
    This is not the first time the European countries have taken issue with the Liberian registered ships. It happened in the ’70s when few countries in Europe questioned the right of ships flying the Liberian flag. It took the United States government under President Richard Nixon to force the few European countries questioning the authority of the Liberian over foreign ships flying the Liberian flag to back off.
    Ha ha ha ha ha ha ha ha ha, who will stand with this regime to force the EU to back down a little on their demands ? The country has not yet recovered from bad economic planning, wasteful spending due to corruption, Ebola Outbreak and now the Coronavirus , and the regime is cashless and in debt.
    Professor Wilson Tarpeh has got his work cut out. But that shouldn’t be hard this time around to make a sound political and economical decisions, as a former Professor of business economics. Ha ha ha ha ha ha ha ha ha ha ha ha ha ! It shouldn’t be difficult ? Liberian Professors? Ha ha ha ha ha ha ha ha ha ! Oh Well .

  4. James Davis, please leave our “don” university professor alone. He is doing his Liberian best, don’t blame him for anything.

    This article is so thought-provoking that any Liberian leader should read it in-depth to understand the incompetence and wickedness of our past “rulerships”.

    According to the Daily Observer, the Liberian Maritime Registry comprises 4,400 vessels representing 12% (which I believe is erroneous, open to verification by anyone) of the world’s ocean-going fleet. But the Daily Observer did not say how much the Liberian government generates from these vessels.

    According to the United Nations Conference on Trade and Development’s report of 2015, the number of vessels flying the Liberian flag is 3,143, representing 3.51% of the world’s total vessels and generating a yearly revenue of $18 million.
    According to the same report, 8,351 vessels fly the Panamanian flag, representing 9.33% of the world’s total vessels and generating a yearly revenue of $255 million.

    Look at the gap between revenues generated by the first and second countries whose flags are used by most vessels in the world. Do the proportionality Mathematics, even a Grade 9 student should know that there is something wrong with the figures for Liberia.
    Why can’t Liberia lobby to have more vessels to fly its flag?
    Why do we earn less as compared to Panama and the Marshall Islands (3rd country)?
    Why is there no company (vessel operator) in Liberia? Cote d’Ivoire and Nigeria have 19 companies (vessel operators) while Liberia has none. What are we doing to correct this? This should also be called a FIX.

    Now, let’s get back to the point of greenhouse gas. Most people hate Trump for this, but I would admonish Africans to always be happy to have someone like Donald Trump at the White House.
    OBAMA signed unto the Paris Accord which compares African countries (not yet industrious) to curtail CO2 emission, what? What? What? Have we started polluting the world?
    With all the vessels in Europe, they account for only 3% of CO2 emission, why can’t we begin to use our brains to buy vessels that will transport our own produce and products?

    Leadership is about adding something to the value chains. Why do we fight and kill our people to propose NOTHING all the time?
    Why is the CDC kicking against the European’s proposal? You better pray for Trump to win, or else it would go into force without any consideration for a negro country.

    Let’s develop love for knowledge. Let’s stop killing our brains for absurdity, let’s learn to identify knowledge, promote it and reward it fairly to move Africa. The killings of qualified people will NEVER help Africa. Let’s vote people based on intellectual excellence, mediocrity has NEVER and can NEVER develop any country.
    Malaysia and Singapore have the highest number of vessel operators (51) in the world, why can’t Liberia create one, at least?

    Uncle Hney, this too, can create more jobs in the shortest time possible. The ANC see possibilities everywhere for Liberia!
    Weah bought is way through, he’s now killing innocent people for fear of being exposed, but he will be exposed, sooner or later!

  5. Petarus Dolo

    You correctly said “the article is so thought-provoking that any Liberian leader should read it in-depth…” Notwithstanding, you concluded an insightful comment with: “Weah bought [his] is way through, he’s now killing innocent people for fear of being exposed, but he will be exposed, sooner or later”. It is telling that in one breath you talked about “love of knowledge”, yet baselessly accused the President of “killing innocent people”.

  6. Mr. Moses, if the spokesman of the government can come out on BBC to say that those 4 people were not auditors, what can be your educated guess, be objective for once?
    Forget about partisan politics, tell me objectively, if any of those people were related to you?

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