Last week, the European Commission (EC) proposed adding shipping to the bloc’s carbon market for the first time.
Under the EU plan, shipping would be added to the European Union Emissions Trading System (ETS) gradually from 2023 and phased in over a three-year period.
When their ships pollute, shipowners will be required to purchase permits under the ETS and failure to do so could result in bans from EU ports.
As well as those ships that are sailing in the EU, the EC’s proposal also covers 50% of emissions from international journeys that start and end in the bloc. Explaining this decision, the EC stated:
“The coverage of a share of the emissions from both incoming and outgoing voyages between the Union and third countries ensures the effectiveness of the EU ETS, notably by increasing the environmental impact of the measure compared to a geographical score limited to voyages within the EU, while limiting the risk of evasive port calls and the risk of delocalisation of transhipment activities outside the Union.”
While preferring an international solution, Claes Berglund, president of the European Community Shipowners’ Associations (ECSA) welcomed the increased climate ambition of the EU. In order to stabilise the carbon price, the ECSA is advocating for a dedicated fund to be set up under the EU ETS.
Others have criticised the move, such as Guy Platten, secretary general of the International Chamber of Shipping, who says it will greatly upset EU trading partners and that it is difficult to see what extending the EU ETS to shipping will achieve towards reducing CO2. Instead, he suggests a global fuel levy with a greater focus on investing in the research and development of decarbonisation technologies would be a better solution.
Speaking about ETS revenues, Faig Abbasov, shipping programme director at NGO Transport & Environment (T&E), said they should be reinvested in deploying zero-emission vessels, port charging and hydrogen refuelling infrastructure.