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"We have nothing in the global [talks] and it is unrealistic to expect a MBM [Market-Based Measure] deal this year, next year, the year after, and maybe the year after that also," one senior EU source told EurActiv.
"On the other hand we have a political commitment to do something regionally if nothing happens globally," he said.
Throughout 2011, the EU is consulting with stakeholders on policy alternatives, including bringing shipping into the Emissions Trading Scheme (ETS), if no accord is reached.
But as the Chinese airlines row rumbles on, there is little appetite for another spat in Brussels.
"The aviation [dispute] shows us that this is probably not the right way to go because if it fails, what have we won beside bad blood and bitterness?" one EU official told EurActiv.
The Bahamas initiative, which was originally mooted in March, was "a positive alternative" to unilateralism, according to EU Transport Commissioner Siim Kallas.
"We are looking for solutions that involve partners," he told EurActiv. "I don't think that a unilateral solution can be a good answer because it can create a lot of political resistance."
But environmentalists believe that the International Maritime Organisation (IMO) is too closely aligned with vested interests to ensure effective implementation of emission reduction measures.
"We would prefer to see more direct EU legislation," Brook Riley of Friends of the Earth told EurActiv.
Bahamas proposal debated in July
The Bahamas' proposal will be discussed at the IMO's Marine Environment Protection Committee meeting, which begins on 4 July.
EurActiv understands that it will take the form of a technical memorandum of understanding regulating new and existing ships for energy efficiency and emissions.
Although weaker than a global treaty, the deal could be implemented under the umbrella of the IMO, and enforced by nation states.
Because of this, "the US would not have to go through the Congress, and China would not lose face because they were entering into a CO2 deal," the EU official said of the current impasse.
"It's really nebulous but I feel more and more that this is the way out," he added.
EU finance ministers last month called on the IMO and International Civil Aviation Organisation (ICAO) to "develop without delay" a global framework for a carbon pricing system.
Many participants at the IMO's conference in July are expected to call for the adoption of an Energy Efficient Design Index.
In a statement on 28 June, Climate Action Commissioner Connie Hedegaard said it was "high time" for an agreement with the IMO.
"Much as we prefer a global solution, the member states and the European Parliament have asked the Commission to present a possible proposal to reduce shipping emissions for 2012 in the case the IMO fails to find a solution," she said.
The World Bank is also reportedly planning to propose a global tax on jet and shipping fuel to G20 governments later this year.
In 2007, BP estimated the annual CO2 emissions from shipping at between 600 and 800 million tonnes, some 5% of global greenhouse gases, and double the carbon pollution from aviation.
In a business as usual scenario, shipping emissions – which like aviation, are not covered by the Kyoto Protocol – are expected to increase up to 75% by 2027.
The EU is committed to reducing total greenhouse gas emissions of 20% on 1990 level by 2020.
Arthur Neslen
