Tue 7 Jun 2011, 07:26 GMT

World Bank to recommend bunker levy


Financial institution to propose global levy on marine and jet fuel later this year, official says.



The World Bank is set to recommend a global levy on marine and jet fuel later this year, news agency Reuters reports.

According to a senior official at the World Bank, the entity will focus on the issue of a levy on shipping and aviation fuels in a report to G20 governments in October.

Andrew Steer, World Bank special envoy for climate change, is quoted as saying: "We are looking at carbon emissions-based sources including bunker fuels and aviation fuels, that would be internationally coordinated albeit nationally collected."

The introduction of a worldwide levy forms part of a plan to keep climate action on track as the cap on greenhouse gas emissions under the Kyoto Protocol is due to expire in 2012 and developed nations are already writing off chances of an agreement on a new binding deal at the United Nations ministerial-level climate change conference in Durban this year.

The Bank has estimated that it will cost an extra US$100 billion per year to help the world prepare for more floods, droughts and rising sea levels. Various sources put the extra cost of reducing greenhouse gas emissions at US$200 billion or more per annum.

Conveying his disappointment at the lack of progress in UN climate talks on the sidelines of a series of climate meetings in Bonn, Germany, Steer said: "Durban could make important progress in a number of areas but an overall deal is not really on the cards right now."

"I've got to say the situation is very urgent and sometimes that sense of urgency is not evident in the negotiations," Steer added.

At present global emissions from shipping and aviation and neither limited nor measured under the Kyoto Protocol. As a result the European Union (EU) has been particularly active in its bid to reduce emissions and, if necessary, implement policy change within the transportation industry should the United Nations fail to reach an agreement.

Earlier this year the International Bunker Industry Association (IBIA) was invited to the Working Group on Reducing Greenhouse Gas Emissions from Ships under the European Climate Change Programme (ECCP) in Brussels.

The European Commission (EC) is in the process of preparing the European Union's (EU) climate policy having been requested by the European Council and Parliament to come forward with a proposal to include international maritime emissions in the EU's reduction commitment should there be no sufficient international agreement addressing these emissions through the International Maritime Organization (IMO), and/or the United Nations Framework Convention (UNFCCC), by the end of December 2011.

The European Union also plans to implement a levy on the emissions of most flights that land or depart from Europe from January 2012, regardless of airline - a measure which Giovanni Bisignani, head of the International Air Transport Association (IATA), on Sunday called illegal.

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