Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) (Amendment) (EU Exit) Regulations 2018

Lord Teverson Excerpts

Wednesday 24th October 2018 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I will follow the noble Lord in the same vein by asking a simple question. I remind the Committee of my historic interest as the Conservative spokesman in the European Parliament on transport issues. Can my noble friend the Minister explain the current enforcement mechanism if either a UK-registered ship or an EU-registered ship breaches the carbon dioxide emissions limit? How does she imagine that that enforcement mechanism will change in the future? Presumably the whole point of having carbon dioxide emissions limits is to ensure that, along with every other form of transport, maritime shipping abides by air quality standards. Will we be able to enforce this unilaterally going forward?

I turn to something that is very topical. Is there currently any jurisdiction for the European Court of Justice over a breach of these emissions standards?

[Lord Teverson (LD)]

My Lords, I should declare that I am a board member of the Marine Management Organisation. I do not think that it conflicts with what we are considering here, but I mention it for the avoidance of doubt. I would like to respond to the noble Baroness, Lady McIntosh, by saying that in her role as leading the group in the European Parliament when the Conservatives were part of the EPP, which is exactly where they should still be, she was a fantastic advocate for her position. I was in a different group that sometimes became involved in things like trans-European networks, and I noted that she was very successful in what she tried to do. She presented a difficult opposition.

I want to come back to a few points about carbon budgets, which is what this comes down to. In her remarks the Minister alternated between talking about carbon emissions and greenhouse gas emissions. There is a very important difference between those two phrases. I would be interested in understanding whether these regulations are in fact concerned with greenhouse gases or carbon dioxide emissions. I know that they refer to carbon dioxide, but most of the monitoring that is done is for greenhouse gases. Although emissions of methane are lower, it is a much more potent greenhouse gas. The difference is important and I presume that it is particularly relevant to the shipping industry, given its emissions.

I congratulate the Minister on reminding us that international shipping is the one area where we still have not solved this issue internationally. In aviation we have this rather dodgy—if I am honest—offset system. We will see how it works, but I suspect that the Amazon rainforest will not grow at the rate that aircraft emissions will. Given that sympathy, I am interested to understand whether, given the fact that we have international paralysis, and with the Government perhaps frustrated by the fact that that sector is not represented within European or British carbon budgets, the UK, as the Climate Change Committee has often advocated, will take on its leadership role in this area again and start to reconsider whether the sector should be. I am not expecting a policy decision today in the Moses Room, but I will be interested to know if the Government will start to look at that issue.

When it comes to individual matters of these particular regulations, I shall quote from the Explanatory Memorandum as the legislation refers to European regulations all the way through and it is very difficult to read, as I am sure the Minister understands:

“The amendments … remove what will become redundant requirements on the UK to make certain reports to the Commission”.


I wanted to clarify whether those requirements, whatever they are, or those reports will actually now be made within the UK anyway.

I am in particularly interested in documents of compliance. I do not know much about this topic although I am sure the noble Lord, Lord Berkeley, is clued up on them. I presume that they will be issued by the Marine and Coastguard Agency. I am interested to understand whether these are existing EU systems. If they are, are we having to replace the IT systems? Are they ready? How many of these things do we issue at the moment and how many are we going to have to issue after March 2019, or after the transition period if we manage to come to an agreement? As we all know, IT systems and the increase in documentation and red tape are one of the biggest challenges in making Brexit work.

I have to ask about this ability to expel ships from a port, which we are getting rid of because we already have the ability to get rid of ships for safety and environmental reasons. I am interested to understand, in terms of EU legislation, what other scenarios the Government were thinking of in that legislation other than safety and the environment, in order to understand what rights we are forgoing.

[Lord Rosser (Lab)]

My Lords, these regulations have already been through the Commons, as obviously the Minister knows better than I do. We indicated our support for them when they were considered there last week, and I hope she will not be too surprised when I say that that is still our position today. In the Commons, in response to points that we raised about the impact of these regulations on compliance with the IMO strategy and targets for carbon reductions from shipping by 2050, the Government said they would provide assurances in writing. I am afraid I genuinely do not know yet whether those assurances—I see the Minister is waving the letter, so if one is not already on its way to me, I would be extremely grateful to receive a copy.

I turn to Part 2 of the annex to the Explanatory Memorandum, headed:

“Statements required when using enabling powers under the European Union (Withdrawal) 2018 Act”,


which refers to the undertaking that has been given by the Parliamentary Under-Secretary of State that:

“In my view the draft Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions from Ships) (Amendment) (EU Exit) Regulations 2018 does no more than is appropriate”.


The Explanatory Memorandum to the previous SI that we were considering went on to say that the changes,

“do no more than is strictly necessary”.

This one does not contain those words. It says:

“This is the case because the amendments being made do no more than ensure the continuing effectiveness of the existing regulatory regime”.

--- Later in debate ---

[Baroness Sugg]

Yes, absolutely. They are issued by the independent verifiers and then checked by the MCA. On compliance and enforcement, the existing regulations bring in fines if people fail to comply. That also allows for the detention of non-compliant ships that come into UK ports. Inspectors from the Maritime and Coastguard Agency will ensure that ships have the correct documentation and will do the enforcement on UK-flagged ships. Other ships using UK ports will also be liable for inspection as part of the port state control regime. Non-compliant ships can be detained and their owners prosecuted via the courts and fined. The enforcement will stay the same, it will just be done under the UK regulation rather than the EU regulation.

I hope I have answered the point made by the noble Lord, Lord Teverson. Rather than it being about greenhouse gas emissions or carbon, it is about the fuel consumption and reducing that over time.

[Lord Teverson]

I am trying to understand whether this is about just carbon dioxide monitoring or greenhouse gas monitoring because if it is just carbon, it is not compatible with UK carbon budgets, which include national shipping. There is a big difference. It seems a fairly straightforward question to me—yes or no? The Minister is welcome to write to say yes or no.

[Baroness Sugg]

I probably will have to write to the noble Lord with details on that. The current monitoring system is about fuel consumption by vessels. When collated, that information will help inform future policy on the reduction of emissions, which will obviously cover greenhouses gases and carbon. I will take up the noble Lord’s offer of writing to him in detail on that.

The noble Lord also asked about the documents of compliance. We want to ensure that the MRV system works as smoothly as possible after we leave the EU so we have taken the decision to recognise all EU MRV certificates issued by other member states as being equivalent to our own. We have the capacity to issue our own but we have already stated that we will recognise those from member states and we hope, of course, that the EU will mutually recognise ours.

We will also ensure that there is no duplication of reporting for ships travelling between the UK and EU states. If a ship notifies us that it has submitted all its verified voyage data to the EU we will not require it to provide us with a duplicate report. We are trying to minimise the burden on businesses as we leave the EU.

[Lord Teverson]

I thank the Minister and I will not intervene again. I welcome the fact that we will recognise EU documentation. That is an excellent decision that will reduce bureaucracy. Do we need to invent a new IT system ourselves and have we managed to do that? I suppose that that is the key point here.

[Baroness Sugg]

No. We already have the ability to issue these certificates so a new system is not needed.

Reference was made by the noble Lords, Lord Teverson and Lord Rosser, to expulsion orders. It is not the Government’s policy to ban or exile ships from a port unless there is an immediate risk to safety, as both noble Lords said. Neither of those conditions would apply to the requirements under this regime. It is a reciprocal requirement that will no longer be relevant when we are not a member state. There will be a practical problem in that when we exit the EU, there is no requirement under the European regulations to notify non-EEA states that a vessel has been banned from an EU port. There is actually no mechanism if we leave without a deal either for us to tell the EU or vice versa. That is why it has not been replicated. However, there is no reason why we cannot share data in the future. As we made clear in the White Paper, it is in our interests and those of the EU that we should continue to co-operate through the EMSA. However, that will be subject to negotiations.

The question of reporting was raised in the other place and I will certainly forward the letter from my honourable friend Nusrat Ghani on this to the noble Lord, Lord Rosser, and others. On the assessments of the impact of the maritime sector on carbon dioxide, we have not retained the paragraph on that in the draft regulations because that obligation applies specifically to the European Commission rather than to member states or to the UK in particular. It is necessary for the effective functioning of the MRV system, so the Secretary of State has taken over responsibility for what was previously held by the Commission. There will be an obligation on the Secretary of State to publish the results of the CO₂ data which we will receive annually from ships in much the same way as the Commission will be doing with the other 27 member states. We will just be taking on the responsibility to publish the data, which obviously will be made available to all those who are interested in it.

Under our domestic legislation, the Secretary of State would not be required to conduct a similar biennial review of the impact on the global climate. The fact that it is not in retained EU legislation of course does not preclude us from undertaking such a review and we are keen to maintain our position of leading the way in this area. I have already spoken about our leading role in the agreement with the IMO in April.

The noble Lord, Lord Rosser, mentioned the IMO system which will take effect on international voyages from 1 January 2019. The systems are very similar in that they both apply to vessels of 5,000 gross tonnes and over, but there are a few differences. The European regime which we are carrying over applies only to voyages undertaken to carry passengers and cargo for commercial purposes rather than other maritime activities such as dredging. It requires more information such as on the cargo being carried by the vessel and more transparency in terms of disclosing data. It also includes a more robust verification process. Ideally, we want to see the IMO and EU systems become aligned while maintaining the environmental integrity of the overall scheme. That is something that we will continue to work on with our international partners in order to achieve it going forward. However, as I said in my opening remarks, at the moment we are allowing the systems on UK-flagged vessels to collect the data so that they are able to report to both systems easily enough.

I hope that I have covered the points which were raised, but if I have not gone into them all in detail, I will certainly write to noble Lords. I hope that noble Lords will agree that the objective of the regulations, which is to maintain an effective regime to monitor emissions from ships, is the right thing to do.