Publication
Keeping your dawn raid guidance current
Unannounced inspections or ‘dawn raids’ are used by antitrust authorities to obtain evidence when there are suspicions that individuals or businesses have infringed the antitrust rules.
Global | Publication | October 2021
As we reported here, in July 2021 (and have since revisited), the EU published its update to the "green deal", known as “Fit for 55” in reference to the 55% reduction in carbon emissions targeted for 2030. A large number of the “Fit for 55” proposals affect shipping: a prime example is the draft measure to extend the scope of the EU Emissions Trading System (EUETS) to include maritime transport. The EU also proposed a trio of measures relating to maritime fuel, which we examine in this article.
FuelEU Maritime Initiative (FuelEU Initiative) is intended to apply to all vessels over 5,000 GT visiting a port within the EU, regardless of the flag of the vessel. The initiative captures not only intra-EU voyages, but also 50% of emissions from voyages which start outside of the EU and end at an EU port, or which start at an EU port but end at a port outside of the EU. It sets out the following proposals:
The draft legislation envisages that funds received from penalties for non-compliance will be used to support projects aimed at the development of non-carbon fuels in the maritime sector.
The proposed amendments to the Energy Taxation directive are intended to come into force in 2023 and will impose taxes on marine fuel sold in the EEA for voyages within the EEA. A 10 year transition period (the Transition Period) is envisaged, with the tax rates rising for some fuels at the end of the period. The proposed taxation rates are as follows:
The draft legislation includes latitude for EU governments to extend these taxes to bunkers sold for international voyages.
The draft revisions to this directive which introduced EU rules to ensure the build-up of alternative refuelling points across Europe with common standards for their design and use are intended to dovetail with the FuelEU Initiative and include proposals to:
These three measures show a commitment from the EU to the decarbonisation of the maritime sector and an attempt to address some of the difficulties which will arise: for example, by not having infrastructure in place to allow vessels to use less polluting fuels when they start to become widely available. There will be a number of other barriers to the more widespread use of alternative fuels in the maritime industry which the legislation cannot yet address such as issues around fuel standards and availability of fuels (and indeed what type of fuels will prove to be the most practicable to introduce), but the proposals acknowledge these difficulties and send a clear message that member states must start to tackle these very difficult and complex issues. This is easier said than done given the lack of an obvious substitute for fuel oil on which almost all ships currently rely.
If these measures are adopted, it is clear that they will result in additional costs for ship operators and their customers: not only from the taxation of fuels but also with practical compliance with the FuelEU Initiative. These costs will need to be aggregated with the cost of being included with the EU ETS which will start to come in as soon as 2023. Whilst the combination of these proposals will create a great financial incentive to decarbonise, the level of investment in port facilities, new fuels, new distribution networks and new ships will be enormous and such investment decisions will have to be made against a background which offers no obvious technical solution to finding a safe alternative to fuel oil. Whether such decarbonisation is technically feasible or practicable on the time scales that the EU envisages remains in doubt. Furthermore, the intention to impose a carbon levy on ships operating on the high seas outside EU waters is not without opposition both within and outside the EU, not least because of the detrimental effect such unilateral imposition may have on the efforts of the IMO to find a global solution.
Publication
Unannounced inspections or ‘dawn raids’ are used by antitrust authorities to obtain evidence when there are suspicions that individuals or businesses have infringed the antitrust rules.
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