Greek Shipping Council Urges Exemption From Forthcoming Greenhouse Emission Tax

by Lorys Charalambous, Tax-News.com, Cyprus

19 June 2009

The Greek Shipping Co-operation Council has reiterated its opposition to any tax or 'market based instrument' on greenhouse gas emissions from shipping, options which are both up for forthcoming discussion at the International Maritime Organization and the UN FCCC meeting in Copenhagen later this year.

"The maritime sector, on the basis of tonne miles of cargo carried, is by far the most fuel efficient means of transport and produces the least harmful atmospheric emissions of any mode of transport," GSCC chairman Epaminondas Embiricos said. "Emissions from ships are different from those typical of other industry sectors. They are not of the same nature nor do they have the same impact on the environment, as those from other industrial sources and modes of transport."

"A number of eminent scientific studies show that this is the case and that emissions from ships have a net cooling effect," he claimed. "This is due to the fact that vessels' emissions include aerosols such as OC and SO4, which seed clouds, reflect solar radiation and cause cooling. In fact the cooling effect of SO4 is 200,000 times greater than the warming effect of CO2. Ships burn fuel containing sulphur, when on the high seas and away from populated coastal areas. Indeed reducing these emissions on the high seas would be counter-productive. Shipping's global cooling effect has been accepted by the IMO Study Group, which considered the matter."

Embricos continued:

"The purported aim of a tax on shipping emissions is to create an incentive upon ship-owners to improve their CO2 emissions performance. However, such economic measures should rather be directed at those interest groups responsible for a rise in emissions through increased trade. Shipping would clearly be wrongly targeted as it is not the root cause of any emissions increase but has only reacted and increased its activities in response to world demand for increased globalisation and trade. If any economic instrument is to be introduced to reduce carbon emissions from ships, it would need to target changes in behaviour on the part of consumers, who presently demand an ever wider choice of imported goods in competition with domestic products. Proposals for changes in behaviour by the public are of course not the most politically popular."

"However the IMO would do a disservice to the public interest if it allowed the misconception to gain ground that the desired changes can be achieved without any involvement on the part of the consumers, and simply by regulation of the maritime industry. The only likely effect of such measures would be to distort competition between shipping and other modes of transport in a manner which could increase, rather than reduce, emissions from transportation as a whole."

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