Emissions trading for shipping sector

A report outlining solutions for reducing CO₂ emissions through emission trading has been launched by the shipping associations of Australia, Belgium, Norway, Sweden and the UK.

The paper, entitled 'A Global Cap-and-Trade System to Reduce Carbon Emissions from International Shipping', highlights how a global and open emissions-trading system for the shipping industry can work in practical terms.

It claims that a 'cap-and-trade' system will be the only way to guarantee an overall reduction in CO₂ emissions from shipping. This will work by allowing an organisation that emits CO₂ to either buy, or be given, a certain number of carbon allowances during the compliance period to cover its emissions.

If the company then exceeds the amount covered by its allowances it will have to buy more from the market and if allowances are left over they can be saved for future use.

The authors of the report believe that this will force operators to pay more attention to efficient planning and management of their fleets and investment in modern tonnage while lowering emissions and supporting innovation and technological development.