Shippers Oppose Green Fuel Taxes

Wednesday, August 03, 2011

Shipper groups say the introduction of green fuel taxes will not reduce emissions. They claim that shipping lines will not switch to more environmentally-friendly fuels or more efficient ships, they will simply add yet another surcharge to the rates they charge their customers.
Nicolette van der Jagt, Secretary General of the ESC, told The Shippers’ Voice: “A uniform levy or tax on all ships and all fuel purchases would be a risk to shippers whichever way you look at it: the added costs will be merely passed on to the customers through surcharges without offering a clear incentive to the carrier to increase the efficiency of the ships or their operation.”
Most of the talk from the shipping sector and governmental organizations involves the establishment of a levy or tax on fuel that is proportionate to the level of emissions from each ship. The way to reduce such charges would be to score well on the recently-approved Energy Efficiency Design Index for ships, as agreed by the International Maritime Organization.
Shippers, including the Global Shippers Forum, the British Shippers’ Council and the European Shippers’ Council (ESC) say this strategy will not work.
Based on their track record, says the groups, the shipping industry, and particularly the liner shipping industry, is likely to pass on these charges to their customers.

Shippers can't be blamed for feeling this way, says a Shippers’ Voice spokesperson. “Every time the liner shipping industry finds another individual cost, it tries to pass it on in a surcharge or ancillary cost, whether it is for fuel price increases, currency fluctuations, being too busy (e.g. peak season surcharges), port strikes, congestion or even fog. Whatever the cost, the shipper is targeted to pay.”

That may seem reasonable to some: you only pay the cost of service. The trouble is, some shippers would argue that they do not always get the service they pay for anyway. Whether it is a delayed vessel, rolled over cargo (i.e. not loaded), or delivered to a different port at a different time than planned because of service changes, the shipper does not always get a good service.

Any business with poor service performance would be looking to rectify the problem so that the service being provided actually improved. But why bother when you can pass the costs on in the form of surcharges or, in an over-supplied market, the rate you get is not worth the effort, and the competition isn’t necessarily much better either?

So, shippers around the world believe a levy or tax will merely be passed on to them, and the ships will have very little incentive to change practice or improve design in order to reduce emission-related charges.

“What is needed is a mechanism which rewards shipping companies which invest in new designs, technology and practices which reduce emissions without reducing service performance; a scheme which does not add to current costs, but clearly provides an incentive to ship operators and owners,” says Shippers’ Voice.
This is a view echoed by van der Jagt: “The preferred approach should be one which provides tangible incentives and rewards to owners and operators of individual vessels who invest in ships and ship technologies that optimise vessel utilisation, operation and fleet sizes, and reduce emissions of GHGs. I believe that shippers will increasingly be drawn to those ships which attract lower costs for the supply chain from lower emissions, provided the service does not diminish.”

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

DMR Publish Latest Container Census Report

Drewry Maritime Research (DMR) says it has just published it's latest Container Census report, providing a wealth of information on the container equipment market.

Höegh LNG Partners Launch IPO

Höegh LNG Partners LP ("Partnership"), a Marshall Islands limited partnership formed by Höegh LNG Holdings Ltd. ("Company"), announced today that it has commenced an initial public offering of 9,

BP Reports Better Second Quarter 2014 Results

BP today announced its financial results for the second quarter of 2014. Underlying replacement cost profit for the quarter of 2014 was $3.6 billion, 34% higher than the $2.

Environmental

Better Coolant Recycling a Big Saving for Caterpillar

The coolant collecting and recycling system is projected to save Caterpillar Undercarriage Xuzhou Ltd. (CUXL) nearly 600L of coolant each year and reduce hazardous

Huge Waves Measured for First Time in Arctic Ocean

As the climate warms and sea ice retreats, the North is changing. An ice-covered expanse now has a season of increasingly open water which is predicted to extend

Company Fined for Oil Spill Near Anacortes

Ecology issues $112,500 penalty for sunken vessel.   American Gold Seafoods faces a $112,500 penalty for an oil spill caused by the accidental sinking of its vessel,

News

Höegh LNG Partners Launch IPO

Höegh LNG Partners LP ("Partnership"), a Marshall Islands limited partnership formed by Höegh LNG Holdings Ltd. ("Company"), announced today that it has commenced an initial public offering of 9,

Mass Flow Metering System for MFO delivery in Singapore

As the world's leading bunkering port Singapore is to provide quality bunkering services to vessels lifting bunkers in the port. The use of the Mass Flow Metering

New Standard gets Revised Program for Cooper Basin Approved

New Standard Energy Limited (New Standard) advises that it has received approval for amendments to its five year work program in PEL570 in the Cooper Basin. As part of the revised program,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Offshore Oil Pipelines Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1810 sec (6 req/sec)