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With concrete action awaiting to lay out the path to decarbonize maritime emissions, Patrick Verhoeven, managing director of the IAPH, and Jutta Paulus, member of the European Parliament and rapporteur for the revision of the EU emissions reporting regulation, discussed setting out rules and mutual expectations.

"Well, what we have been doing worldwide so far is like the game Mikado, whoever moves first, loses," said Jutta Paulus, member of the European Parliament comparing efforts to agree on global regulations to reduce emissions in maritime to a game of pick-up sticks, popular in Paulus' native Germany. The game requires one to remove sticks from a pile without causing disturbance to the others.

"And that is obviously not the correct way to address the crisis," she warned. Paulus is deeply ingrained in this topic as she, within the parliament is a member of the committees on Environment, Public Health, and Food Safety; Industry, Research and Energy; and Transport. She is also the EU rapporteur for the revision of the monitoring, reporting, and verification regulation (MRV) , the EU's maritime emissions and fuel usage report system.

"If anyone said to me, why don't we bring in a global carbon tax, which is negotiated on the IMO level and applied worldwide to every single journey, I would say, let's do it tomorrow," she said.

Countering the argument that the planned inclusion of maritime in the EU's emission trading scheme (ETS) will cause a patchwork of regulations to adhere to, she said, "I don't think that the EU will say, we won't participate in any global measure because we like our ETS so much. I think if there was a measure that was actually working and where there are no loopholes, you would of course say well, great shipping is covered in this global measure so we can take it out of the ETS again."

This might be relieving to hear for the maritime industry, but Paulus also made clear that there is not much desire from the other included sectors to have maritime be a part of the deal. "When the talk started about including maritime in the ETS, it was not yet clear whether shipping would be a siloed ETS or whether it would be included in the general ETS where power production industries are in. Those now say the avoidance cost in shipping is much higher than in power production, which will hurt us but not shipping," she explained, adding that "if there was a global measure, the commission would also receive pressure from the industry to take out shipping again."

Getting everyone on board

The managing director of the IAPH, Patrick Verhoeven, agreed that it is good to have front running regions such as Europe who move ahead. "And I must say, I am very pleased to hear that potentially, once there is a global instrument, we would withdraw shipping out of the ETS again. I think that's a good incentive to make progress at a global level."

The above article is an excerpt from the cover interview of Ports & Harbors magazine, September/October 2021. Ports & Harbors is the membership publication of the International Association of Ports & Harbors.

Jutta Paulus has been a German member of the European Parliament for the Greens/European Free Alliance since July 2019. Before, she worked in quality management and controlling in laboratories and hospitals. Paulus holds a bachelor of pharmacy from the Philipps-Unversität of Marburg, Germany.

Patrick Verhoeven is the managing director of the International Association of Ports and Harbors (IAPH), responsible for policy and strategy. The organisation represents about 170 ports and some 140 port-related businesses in 90 countries worldwide. Prior to joining IAPH in 2017, Patrick spent twenty-four years in Brussels representing the interests of shipowners, port authorities, terminal operators and ship agents at EU level. He started his career in 1991 with the Antwerp-based ship agent Grisar & Velge. Patrick holds a PhD in applied economics and a bachelor's in law from the University of Antwerp.

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Posted 16 June 2022 by Ines Nastali, Senior Maritime Data Expert, S&P Global Market Intelligence

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.