European shipowners and airlines are calling for revenue from the EU Emissions Trading Scheme to be channelled more towards sustainable fuels and technologies.
The European Community Shipowners’ Association (ECSA) and the industry association Airlines for Europe (A4E) are calling on the European Commission to allocate a greater proportion of revenue from the EU Emissions Trading Scheme towards the decarbonisation of shipping and aviation.
€11 billion annually in EU ETS revenue
According to the associations, both sectors already contribute more than €11 billion annually to EU ETS revenue. These funds should be used primarily to secure investment in sustainable fuels. Such fuels are currently, on average, around four times more expensive than conventional fuels in shipping. In aviation, the ratio is between three and six.
The European Commission should require EU Member States to earmark at least part of their ETS revenues for the availability and use of sustainable fuels in shipping and aviation. Existing EU mechanisms should also be supplemented with national ETS revenues.
Fuel availability as a bottleneck
ECSA Secretary-General Sotiris Raptis pointed out that, according to the association’s figures, European shipowners account for 44 per cent of the global order book for ships powered by sustainable fuels. However, the availability of such fuels in Europe is not keeping pace. Asia accounts for 74 per cent of production projects, whilst Europe accounts for 10 per cent. Less than 5 per cent of European production of sustainable fuels is currently earmarked for maritime applications.
The shipping industry contributes around €9 billion to the EU ETS, according to Raptis. This money should be used at EU and national level to reduce the price difference compared with conventional fuels and to support projects for sustainable fuels and clean technologies.
A4E estimated the ETS contribution from European airlines for 2024 at €2.3 billion. By 2030, this figure could rise to more than €5 billion annually. The association estimates that the 20 million SAF allowances currently planned will not be sufficient to meet demand by 2030.
