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The Hong Kong Shipowners Association (HKSOA) has declared its support for the proposed Danish Compensation Fund over an Emissions Trading Scheme as the basis for an IMO regulation to reduce greenhouse gas emissions.

Under the scheme promoted by the Danish Maritime Authority, a levy would be imposed on vessels regardless of flag, but the proceeds could be channelled to developing countries with less rigorous emissions reduction targets under the Kyoto Protocol.

In a statement, the HKSOA said “The Association believes that the Compensation Fund should be used as the basis for developing industry wide consensus on this urgent and essential issue. There would appear to be two quite distinct groups of options under consideration, Emissions Trading, or a ‘levy’ or Compensation Fund. While the Association fundamentally supports the Fund concept over an Emissions Trading Scheme, the Association believes that a compromise solution can be developed that combines the simplicity of administration of the Compensation Fund with the political acceptability inherent in a declining cap or target that is one of the main features of Emission Trading schemes.”

“In particular the Association supports the Compensation Fund on the basis that it adheres to the ‘pay-as-you-purchase’ concept and articulates in detail the formation and mechanics of the resulting Fund. The Association notes that there are various ways to determine the level of contribution to the Fund, and has not yet come to a firm conclusion as to the best way of pricing this contribution on a continual basis. The Association recognizes that there may be a need for the final version of the scheme to contain an element of direct industry contribution towards the reduction of global emissions over time in order for the solution to receive broad based support from other stakeholders.”