Israel Plans National Oil Spill Response System Funded by Tanker Fees

An interministerial team in Israel has recommended establishing a dedicated national system to handle marine oil pollution in Israel's territorial waters. The proposed system would cost approximately 40 million shekels to set up, with an annual operating budget of about 37 million shekels. Funding is expected to come from fees imposed on oil tankers unloading at Israeli ports, with the report's authors estimating the economic impact on the market and cost of living to be negligible.

Currently, Israel lacks a comprehensive national response capability for large-scale oil spills. The report states that existing response capacity covers only about 30% of what would be needed for a significant spill in territorial waters and drops to 10% for deep-sea incidents. The plan includes six marine response units, four in the Mediterranean and two in the Red Sea to protect the ecologically sensitive Gulf of Eilat, equipped with oil recovery vessels and containment equipment, plus a land-based logistics system for waste management and emergency coordination.

The report was developed amid ongoing disputes over the Israel Corporation's subsidiary, Kenan Group (KTS), formerly known as Knesset Company for Oil and Gas Activities (KTS), and the potential expansion of oil transport through the Gulf of Eilat. The government canceled its "zero additional risk" policy for Eilat in 2024, leading to legal challenges by the company against restrictions at the Ashkelon terminal. The report also highlights a major 2014 environmental disaster caused by a pipeline leak from the company in the Avrona nature reserve.

The team examined spill scenarios involving up to 4,000 tons of oil, warning of severe economic and environmental damage. A large spill in the Mediterranean could cost Israel up to 122 billion shekels, affecting desalination plants and coastal power stations, while a spill in the Gulf of Eilat could cause up to 11 billion shekels in damage. The report recommends a transitional period during which the Ministry of Environmental Protection can require entities expanding oil transport activities to close preparedness gaps.

Regarding financing, the report suggests a fee structure based on the volume of oil unloaded, with a possible reduced fee for transit oil to avoid regulatory imbalances. The expected fee burden is less than 0.1% of the annual 35 billion shekel value of fuel products refined in Israel. The report stresses that the national system does not relieve oil transport and storage companies of their responsibility to prevent pollution, but rather supplements their capabilities for major incidents.

Kenan Group welcomed the report's conclusions that place responsibility for territorial waters and extreme scenario preparedness on the state, not the company, contrasting with the Ministry of Environmental Protection's position. The company affirmed its ongoing commitment to safety, environmental protection, and emergency readiness and said it would provide a formal response after reviewing the report. The report also aligns with Kenan Group's long-term plans to develop an oil pipeline bypassing the Strait of Hormuz, linking Saudi Arabia's Yanbu port to Eilat and then to the Mediterranean via the existing Eilat-Ashkelon pipeline.