EU urged to put shipping recovery ahead of green deal

Market: Emissions, Oil products
03/04/20

The European Community Shipowners' Associations (ECSA) said the shipping industry has to recover from the impact of the coronavirus pandemic before it can commit to a green deal.

ECSA secretary general Martin Dorsman urged the European Commission to assess the impact of the pandemic on the shipping industry and "work on a recovery plan, before stating that the European green deal is keeping to its deadline no matter what".

The green deal is a plan to decarbonise the EU economy by 2050 through a raft of measures, including carbon market reforms, changes to energy taxation and carbon pricing measures at the EU border. The commission is considering widening the European carbon trading market to cover shipping and road transport.

The EU published a climate law proposal on 4 March as a step towards making the EU's target of zero greenhouse gas (GHG) emissions by 2050 legally binding.

Shipping can be decarbonised by developing more fuel-efficient engines and vessels, and using low-carbon marine fuels such as hydrogen fuel cells, methanol, batteries and ammonia.

Dorsman said it is "impossible for the industry to continue the process of greening the fleet, which was picking up speed before the [coronavirus] pandemic set in, should this continue".

ECSA welcomed the European Green Deal when it was unveiled by the commission in December.

"Through innovation and deployment, we show the rest of the world shipping can be highly competitive while moving towards zero emissions," Dorsman said then.

But as the coronavirus pandemic has curbed shipping demand and particularly passenger ship operations in recent weeks, ECSA said it is unrealistic that the shipping industry will play a part in the move towards a green deal before they have recovered "to sustainable levels of activity".

Many shipping companies "are facing liquidity issues and a sharp decrease in financing options, and a drop in cargo volumes is most likely to happen in the coming months", Dorsman said.

Passenger shipping was hit by the travel bans immediately, but demand for container and bulk shipping has also been severely reduced.

European shipowners own 40pc of the global fleet, and shipping makes up 76pc of the EU's external trade and 32pc of its internal trade, according to ECSA.

By Erik Hoffmann

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