London International Shipping Week. 10 September 2015

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1 London International Shipping Week 10 September 2015 Session 3 13:15 14:45 The role of governments in a global maritime industry: Should governments lend their support and how can they participate in growing their domestic sectors? How can tensions between national, regional and global priorities be resolved? "How the European Commission sees the EU role developing in terms of international shipping policy setting." 1. General Introduction 2. The importance of EU shipping 3. The European support to the maritime industry Fiscal regime and competitiveness Trade opportunities Promotion of intra-eu Short Sea Shipping Simplification and digitalisation Social agenda 4. The European commitment to quality shipping Promotion, ratification and enforcement of international rules Data collection system for GHG emissions Stability rules for passenger ship safety 5. Conclusion 1

2 General Introduction Ladies and gentlemen In March when we all met for the first European shipping week I said I had a dream with three elements for EU shipping. First that the European Shipping Industry would make its voice heard and defend our interests at international fora (as aviation does it in ICAO). Second that the 28 EU Member States see the common interest and join forces to promote together our interests internationally (particularly in IMO). Third that our industry together convinces our Member States that our common interest for quality, competitive shipping, that creates also employment of EU seafarers, goes beyond the narrow national interest, and we all fight internationally to promote our values working together. Which brings me to some of the points I want to highlight in this international gathering. The importance of EU shipping Let me recall a few striking figures: the EU shipping industry controls 40% of world tonnage and around 30% of ships (in DWT) controlled by the EU are registered under EU flags. In 2013, the EU shipping industry is estimated to have directly employed 615,000 people 1 whilst in general supported employment for an estimated 2.2 million people in the cluster. Taking all of the impacts together, direct, indirect and induced, the total GDP contribution of the European shipping industry in 2013 is estimated to have been 147 billion. More than 70% of goods (in tons) imported in the EU are carried by sea. 1 EU 28 plus Norway; source: Oxford Economics study on EU shipping, February

3 The European support to the maritime industry All this explains why we in the European Commission have always been a strong supporter of the European shipping industry and will continue to do so in the interests of growth and jobs and the public at large. A few points to make. On Fiscal regime & competitiveness In Europe we support our shipping industry - and the maritime cluster in general - through a number of ways: a favourable state aid regime which helps to maintain an EU controlled fleet, international cooperation to reach a level playing field and promote market access, support to innovation and EU competitiveness. With the tonnage tax system, the EU-controlled merchant ship has managed to retain most its own flagged vessels in EU registers. The EU Competition authorities have also looked favourably at the process of market consolidation and market concentration within liner shipping which is still dominated by European maritime companies. Studies estimate that the economic impact of shipping would have been half as important if it had not been for the EU state aid measures and we would have seen much more EU-controlled ships flagged outside the EU. The industry wants to keep these rules unchanged although some suggest extending the benefits further. In any event, I believe there will not be major changes in approach. Trade opportunities For the European shipping sector to prosper on a global level we must ensure free access to markets and a level playing field for ship-owners and operators. That is why the EU promotes the inclusion of maritime transport in its trade negotiations. The negotiations of the TTIP with the US are crucial to achieve 3

4 further opening of the market and flexibilities that will allow European shipping to operate in a more efficient manner. The EU is keen for a global level-playing field for quality shipping, based on equal rules and open markets. While the EU is quite open, many third country markets have restrictions in place to favour own industry. This reduces business opportunities for EU industry and cements inefficiencies in global supply and logistics chains. The European Commission, with the view of safeguarding EU's maritime interests, regularly engages in bilateral dialogues, including on Free trade agreement, with a number of countries, including major maritime partners such as China, Japan, Brazil, India and US. Promotion of intra-eu Short Sea Shipping Given its better fuel efficiency (e.g. a big container carrier vessel emits up to 20 times less CO2 per ton of goods transported than a truck), its growth potential (wide unused capacity of the sea) and Europe's favourable geography with many gulfs and islands and 1200 port terminals along km of EU coasts, the EU has a strategic interest in ensuring the continuous performance of Short Sea Shipping and enhancing the further development of maritime links in Europe. We support the European shipping industry in picking up new technologies for complying with the provisions of the new environmental requirements, such as the limits on the sulphur content of marine fuels. We also consider a top priority to make progress in the area of administrative simplification and to integrate maritime transport in full logistics chains via the Trans-European Networks policy. Simplification and digitalisation Contrary to other modes of transport, today's shipping industry is still faced in maritime transport with countless reporting requirements, most of them on paper and which need to be re-submitted at each visited port. This entails inefficiencies and costs that are detrimental to our economies. Furthermore 4

5 there is scope through digitalisation to share further information across modes in a harmonised way. Digital solutions play a key role for simplifying procedures. We have in Europe a solid basis with the EU Maritime Information and Exchange System hosted by the European Maritime Safety Agency. Further digitalisation of maritime transport is crucial for integrating maritime transport better into the logistic chain. Social agenda In all transport modes we need a qualified workforce and maritime transport is no exception. But we witness a constant decrease of European seafarers. This is worrying. Seafarers are the base of the maritime industry. Without them we lack critical know-how not only at sea but also in the businesses which are based on shore. The European Commission has already launched several initiatives to reverse the trend but there is scope for further action. The European commitment to quality shipping Quality shipping is at the heart of the European industry that the European Commission supports. But knowing very well that shipping is a global business our priority has always been to develop globally-aligned rules and standards for shipping that are implemented effectively by all, especially in safety, security and the environment. The IMO should not be a playground for national interests or for countries to play power games. Those kinds of attitudes won t help us get rid of oldfashioned protectionism and sub-standard services. To my mind, the IMO is the one forum where everyone involved in the complex world of shipping should work together for the interests of the sector itself. 5

6 It is the way for us to make sure that the world s maritime community uses safer and cleaner ships and that conditions are equal for everyone to compete. In short, quality shipping on a global scale. Promotion, ratification and enforcement of international rules As regulators and industry, it is not only our collective responsibility to make sure global regulation functions effectively but also to stay ahead of developments and not just wait for the next accident to happen. Even more important is to make sure that the common standards are applied and particularly enforced around the world. And here I should sound a note of caution. The EU and its Flag States continue to be IMO's "best friend" by providing expert support to maritime law implementation and having established the strictest enforcement framework for IMO Conventions. To substantiate this I would like to highlight the role of the European Maritime Safety Agency which for more than 10 years has been providing expert support to EU Member States as Flag States, port States or coastal States in coping with their duties under international and EU law. In fact, the Agency also assists a number of non-eu States around sea Basins the Union shares with its neighbours. The Agency also provides a unique platform for discussion on all maritime issues with experts from Member States and from industry, drawing from the combined pool of knowledge in the interest of the best qualified advice for the development, implementation and application of international and EU legislation. Also worth mentioning as a last resort for ensuring compliance with maritime law standards, the European Commission can take EU Member States to the European Court of Justice for not fulfilling their legal obligations properly. 6

7 Data collection system for GHG emissions Let me give you one example that is high on the agenda why the IMO is the one forum where everyone should work together for the interests of the sector itself. If we failed to agree on measures to regulate CO2 emissions in shipping, regional go-alones would have a distorting effect on international shipping markets. It would also undercut and undermine the efforts being made by the entire global shipping industry to achieve meaningful cuts in CO2 emissions. But the same example also shows that we can work together when the shipping sector managed to agree the Energy Efficiency Design Index, before any other pressures came to bear. We are now embarked on setting up a global system to collect data on fuel consumption and emissions. The inter-sessional meeting taking place here right now is crucial towards finalizing a concrete proposal on the technical content of a mandatory data collection system in order to allow for an international agreement to be reached by the MEPC in We need to be able to show that the shipping industry is also making its contribution ahead of the 21 st Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 21) to be held in Paris in December. The EU Monitoring, reporting and verification system that entered into force on 1st July 2015 serves as a source for inspiration for these discussions. Our strong preference has always been for a global system to be set up. 7

8 Stability rules for passenger ship safety The other obvious area where we need to make progress together at the IMO is passenger ship safety. It is time to improve the existing regulations on the stability of passenger ships. Following the Costa Concordia accident in January 2012, a standing agenda item was introduced on passenger ship safety before the Maritime Safety Committee in the IMO. European input has since helped advancing important issues within IMO, including the operation of watertight doors within passenger ships; evacuation analysis and damage stability. The European Commission considers damage stability of crucial importance given that this is the sine qua non requirement determining the survivability of a ship after an accident (e.g., grounding, collision, fire, water on deck, etc). Conclusion The European Commission has iterated in various instances its determination to work within IMO to achieve a level playing field in maritime transport by defining and implementing internationally agreed and evidence-based rules and standards for competitive, safe, secure, efficient and environmentally friendly shipping. As mentioned, our focus now is on the effective implementation, operation and cooperation of all involved. We are all aiming at a continuous improvement in a common strive for quality shipping and for "safe, secure and efficient shipping". So, when it comes to safety, security and the environment, we are all in the same boat! 8

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