Greek shipowners have welcomed that charterers may have to carry some of the carbon cost of ships trading in the European Union.

In a considerable concession to the maritime industry, EU regulators acknowledged that charterers may become liable for carbon allowances, as the bloc includes shipping in its cap-and-trade Emissions Trading System (ETS).

“In line with the polluter-pays principle, the shipping company could, by means of a contractual arrangement, hold the entity that is directly responsible for the decisions affecting the CO2 emissions of the ship accountable for the compliance costs under this directive,” the draft EU legislation, unveiled by the European Commission on Wednesday, said.

“This entity would normally be the entity that is responsible for the choice of fuel, route and speed of the ship,” it added.

Making charterers pay part of the ETS cost was a long-standing demand by the Union of Greek Shipowners (UGS), as well as by other shipowner organisations in Europe. The government of Greece, an EU member state, has sided with this position.

In a statement issued on Thursday, the UGS expressed its satisfaction with the relevant formulation unveiled the day before.

“The recognition of charterers’ accountability for bearing the compliance cost under the EU ETS directive is an important and well-supported provision,” UGS president Theodore Veniamis said.

Unilateral burden

However, the UGS, was far less happy with other fundamental parts of the legislative proposal, to the point of criticising the very inclusion of shipping in the ETS.

“A cap-and-trade system is unworkable for the thousands of shipping small and medium enterprises that make up the largest segment of the industry,” the UGS said.

The EU’s decision to move independently from decarbonisation proceedings at the International Maritime Organization represents “a unilateral burden” imposed by Europe on international trade, Veniamis said, adding that he “fully understands the deep concerns” of the bloc’s international trading partners.

The UGS also failed to see anything positive in the EC's FuelEU Maritime proposal — legislation intended to increase the use of sustainable alternative fuels by addressing market barriers that hamper their use.

FuelEU Maritime “unfairly and unduly” targets ship operators instead of “imposing a fuel mandate on fuel suppliers, as is the case with other modes of transport”, Veniamis said.

The UGS said it was now looking to the European Parliament and EU member states to amend what it described as the EC's “controversial proposals”.

The Greek government has already signalled that it is paying heed to its shipowners' arguments.

Shipping minister Yiannis Plakiotakis said in a speech earlier this month that Greece supports "feasible solutions" to reduce shipping's greenhouse gases "under the guidance of the IMO".

Only the IMO can introduce carbon pricing in a way that does not put the shipping industry's long-term viability at risk, Plakiotakis said.

Different international shipping organisations have reacted in varying tones to the proposals unveiled by the EC.

The European Community Shipowners’ Associations (ECSA) and the German shipowners' association, VDR, took a more supportive tone of the EC's intent, although they too remained critical of key elements of policy.

The International Chamber of Shipping, by contrast, has described the EU ETS as a “money grab” that would not cut GHG emissions significantly.