Climate change may not be the main focus in the debate over whether container liner companies’ agreements to share vessel space should have an exemption to US competition law.

But decarbonisation’s appearance in the European Union fight over that same exemption provides a preview of how industry collaboration on the environment may clash with regulatory scrutiny aimed at preventing collaboration that hurts consumers.

To overcome first-mover disadvantages, industries will need to work together to tackle carbon. But competition laws are in place to prevent cooperation that threatens to shoulder consumers with higher prices.

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Regulators will face a balancing act, weighing the benefits of tackling greenhouse gas reductions with the need to protect customers from market collusion.

And — as in the case over the Consortia Block Exemption Regulation (CBER) debate for shipping — the environmental benefits of industry collaboration may be a subject of disagreement.

In Brussels, shipowner and operator groups are asking the European Commission to renew, without changes, the CBER exemption that allows many liner companies to cooperate to provide joint services when it expires on 25 April 2024.

Liner operator group World Shipping Council, the International Chamber of Shipping and the Asian Shipowners’ Association have said to EU officials that arguments against renewing the exemption without amendment serve to undermine the 27-nation bloc’s decarbonisation objectives.

They pointed to International Maritime Organization data that showed larger container ships result in “vastly lower” CO2 output than using smaller vessels.

The bigger ships benefit

“Since consortia enable carriers to operate larger ships than they could viably operate alone, they are indispensable to the EU’s fight against climate change,” the shipping groups wrote in a submission to the commission.

Yet the effort to renew the exemption is facing heavy pushback from shippers, freight forwarders and even EU member country competition regulators as they question the claimed efficiency gains and express concern about market concentration.

Margrethe Vestager, executive vice-president of the European Commission, appears at a meeting on 5 October. She is the EU competition commissioner. Photo: European Commission

The European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT) also argued that the growing market concentration and increased cooperation among lines stifles innovation and has not led to significant reinvestment of profits into sustainability.

And CLECAT said that the block exemption regulation can hamper sustainability instead of reducing environmental impact.

“It has allowed carriers to reduce direct calls at EU ports,” the group said. “This has led to more transshipment and longer hinterland transport by road freight transport, which increase the [greenhouse gas] emissions of supply chains.”

Other container shipping stakeholders warned of the prospect that liner operators will make their customers shoulder the cost of decarbonisation.

“The commission should assess the appropriateness of the CBER’s current exemptions for exchange of information and limit the scope for the coordinated passing through of these costs to shippers,” wrote the Global Shippers Forum.

Decarbonisation’s role in the debate comes at a time when the contours of how competitors can collaborate to reduce emissions, while staying clear of antitrust enforcers, can create problems.

Racing slower on coal

Coalitions that are truly focused on decarbonisation have expressed worry. The United Nations-backed Race to Zero campaign, for example, revised the wording of a statement that coal production is not part of a science-based decarbonisation pathway because of risks over competition law.

Martijn Snoep, chair of the Netherlands competition regulator Authority for Consumers and Markets, told the FT Moral Money newsletter recently that the EC’s guidelines on anti-competitive sustainability agreements are too strict.

Lawyer Marjorie Holmes is a partner in the global regulatory enforcement group at law firm Reed Smith. She is based in London. Photo: Reed Smith

He urged companies to challenge the commission before the European Court of Justice.

But Marjorie Holmes, a partner in the global regulatory enforcement group at law firm Reed Smith, said the court’s decisions are often informed by the Directorate-General of Competition, known as DG COMP.

She said the EC recognises three consumer benefits that justify restricting competition. One is the assumption that a more sustainable product or service is a better one, and another is consumers’ knowledge that their purchase benefits the environment, as with fair trade labels.

Finally, consumers benefit when the public benefits, but the EU body wants to ensure consumers are only shouldering a fair share of the burden.

“To the extent, a clear balance is struck between the environmental benefits and restriction of competition in the market, the EU appears to be willing to consider various environmental agreements in informing its policy,” Holmes told TradeWinds.

DG COMP also ruled last year that, in a case on agreements on car emissions, sustainability is not used as a mask for a cartel.

Shipping will have to be careful not to apply a coat of greenwash to market cooperation.


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The operation has now raised €2bn ($1.94bn) for its hydrogen impact fund, Clean H2 Infra. This exceeded initial expectations, the company said.

Cash will be aimed at scaling proven hydrogen technologies for mature infrastructure assets.

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