The European Union has agreed to add shipping to its carbon market, thus requiring vessels to pay for emissions.
Partly because of the massive lead time when it comes to changing the raw material of transport – the ships themselves, and partly because of its global nature, the shipping sector so far has been exempt from the EU carbon market, which requires factories and power plants to buy permits when they emit carbon dioxide. The aim is to give companies a financial incentive to emit less carbon.
But time has caught up with the shipping companies, and from 2024 they will have to buy EU carbon permits to cover 40% of their emissions, rising to 70% in 2025 and 100% in 2026.
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.
Rapporteur Peter Liese, lead EU lawmaker on the rules,
said on Wednesday November 30th that “this will not only help the
climate but also improve air pollution in cities close to rivers and the coast”.
However, he warned that “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.
Sotiris Raptis, secretary general of the European
Community Shipowners’ Associations (ECSA), said that “decarbonizing 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,
The deal was reached late on Tuesday. It will add to the
carbon market all carbon dioxide, methane and nitrogen dioxide emissions from
maritime voyages within the EU. Significantly, it would also include 50% of
emissions from international voyages starting and ending in the EU.
Negotiators also agreed to dedicate revenues from the
sale of 20m EU carbon permits, which corresponds to €1.5bn under the current
ETS carbon price, to fund maritime emissions-cutting projects.
EU negotiators will attempt to agree the rest of the
carbon market upgrade by December 17th. Should they fail, then the
agreement on shipping would be at risk.
