Maersk CEO backs bunker tax

Nils Smedegaard Andersen says bunker levy is best way to cap greenhouse gas emissions.

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Updated on 27 May 2009 10:02 GMT

A.P. Moller-Maersk Chief Executive Nils Smedegaard Andersen has indicated that he is in favour of a levy on bunker fuel as the most effective way of delivering further cuts in shipping emissions. Speaking on the sidelines of a business climate conference, Anderson told Reuters "The best way to cap the global shipping industry's greenhouse gas emissions would be a tax on fuel consumption as that would be easiest to control and administrate." Anderson's support for a global bunker tax follows the release of a report last week by the International Maritime Organisation (IMO), which said that imposing a levy on bunker fuel or the incorporation of shipping into a global Emissions Trading Scheme (ETS) would both represent an "efficient and cost-effective" way of delivering further cuts in shipping emissions. Many national associations support one or other of these two measures - for instance the British Chamber of Shipping has come out in favour of ETS. Commenting on how the revenue obtained from a bunker levy should be used, Anderson said the tax money should be put in a fund to be used for environment friendly measures. "We of course believe it's easier to argue for a tax if money is actually spent on reducing the strain on the environment, rather than becoming just another source of revenue for governments," he added. Andersen said he also hoped to be able to transfer most additional costs from a climate deal onto customers. "It'll depend how high the tax would be," he said. A new global climate deal is due to be settled at the United Nations Framework Convention on Climate Change(UNFCCC) in Copenhagen in December. It is feared that competition will be distorted if the Copenhagen talks do not result in a global deal, causing some countries and regions to regulate separately. "The most important thing is that it's the same for everyone. Otherwise you'll get distortions in global shipping competition," said Anderson. Shipping schemes will be discussed further at the next Marine Environment Protection Committee (MEPC) Meeting in London in July. IMO's Working Group on Greenhouse Gas Emissions (GHG) from Ships will submit a report of its discussions (9-13 March 2009) regarding the development of an Energy Efficiency Design Index for new ships and revised Interim Guidelines on the Energy Efficiency Operational Index.