Abstract

Exploring how transnational environmental governance and the operation of global value chains (GVCs) intersect is key in explaining the circumstances under which mandatory disclosure can improve the environmental footprint of business operations. We investigate how the governance dynamics of the tanker shipping value chain (a major emitter of greenhouse gases) limits the effectiveness of the European Union (EU) monitoring, reporting, and verification (MRV) regulation, which mandates the disclosure of greenhouse gas emissions for ships calling at EU ports. Although MRV seeks to help shipowners and ship managers save fuel and reduce emissions, it does not address the complexity of power relations along the tanker shipping value chain and currently cannot disentangle how different actors influence the design, operational, commercial, and ocean/weather factors that together determine fuel consumption. In particular, the EU MRV neglects to reflect on how oil majors exert their power and impose their commercial priorities on other actors, and thus co-determine fuel use levels. We conclude that, in its current form, the EU MRV is unlikely to lead to significant environmental upgrading in tanker shipping. More generally, we argue that regulators seeking to facilitate environmental upgrading need to expand their focus beyond the unwanted behaviors of producers of goods and providers of services to also address the incentive structures and demands placed on them by global buyers.

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Author notes

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This research was supported by the Social Sciences and Humanities Research Council of Canada Green Shipping Partnership Project [Grant No. # 895–2017–1003], and we would like to express our thanks for this support. We would also like to express our thanks to Christos Kontovas, Jane Lister and three anonymous reviewers for their highly valuable feedback and advice. Finally, René Taudal Poulsen would like to thank the shipping company, which gave him the opportunity to conduct studies onboard one of its product tankers.