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EU agrees preliminary ETS deal for shipping

EU institutions have hammered out a preliminary agreement to include shipping within the scope of the emissions trading system (ETS).

Under the deal struck late Tuesday evening, all ships of 5,000 gt and over within the EU will be required to pay for 100% of their emissions, while 50% of the emissions on voyages between EU and non-EU ports will be covered.

The percentage of emissions covered will increase over time, starting at 40% in 2024, moving to 70% in 2025, and reaching 100% by 2026. These figures still need to be confirmed by member states during the next negotiating round.

Compared to the initial European Commission proposal, an agreement was reached not only to include CO2 in the ETS but also methane and NOx, as well as offshore vessels over 5,000 GT.

Negotiators also secured earmarking for 20m ETS allowances, which correspond to €1.5bn ($1.6bn) under the current ETS carbon price, to be reinvested into the sector via an innovation fund.

“Decarbonising shipping is not a question of if but a question of how. Setting aside part of the ETS revenues for maritime is a victory for the decarbonisation of the sector. Dedicated support through the Innovation Fund is key to bridging the price gap with clean fuels, improving the energy efficiency of ships, fostering innovation and building the infrastructure in ports,” said Sotiris Raptis, secretary general of the European Community Shipowners’ Associations (ECSA).

“With this ambitious ETS covering all greenhouse gases, offshore vessels and ensuring funding for green shipping, the EU has thrown the gauntlet down to other jurisdictions like the US, China, and Japan to make this hugely important first step towards zero-emission shipping,” added Jacob Armstrong, sustainable shipping officer at Europe’s clean transport campaigner, Transport & Environment (T&E).

The ETS is part of the “Fit for 55 in 2030 package”, which is the EU’s plan to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. The next meeting on the ETS is scheduled for December 16 and 17 where negotiators will try to reach an overall agreement on the ETS revision.

“There are still very difficult points to be solved in the ETS negotiations, including free allowances for the industry, the innovation fund, the modernisation fund and the inclusion of heating and road transport in the scheme,” warned Peter Liese, Parliament’s ETS rapporteur.

Adis Ajdin

Adis is an experienced news reporter with a background in finance, media and education. He has written across the spectrum of offshore energy and ocean industries for many years and is a member of International Federation of Journalists. Previously he had written for Navingo media group titles including Offshore Energy, Subsea World News and Marine Energy.
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