EU Parliament decides on shipping’s position in ETS

The EU Parliament voted in favour of extending its ETS to shipping and road transport two weeks after it also voted on expanding coverage to all departing flights from the EU. The Parliament has voted in favour of including all ships above 400 gross tonnage and offshore vessels in the EU’s carbon market.

The Parliament wants to cover 100% of emissions from intra-European routes as of 2024 and 50% of emissions from extra-European routes from and to the EU as of 2024 until the end of 2026. From 2027, emissions from all trips entering and leaving European ports should be covered 100% with possible derogations for non-EU countries where coverage could be reduced to 50% subject to certain conditions. Polluters will have to pay for all greenhouse gases they pollute – CO₂, methane and nitrous oxide.

Sofie Defour, climate manager at T&E, said: “This marks a historic day for European climate policy. Expanding the EU’s flagship cap and trade scheme ensures that more of Europe’s polluters are made to pay.”

A key element of the Parliament’s position is the enforcement of the ‘polluter-pays’ principle, by ensuring the mandatory pass-through of the ETS costs to the commercial operators of the vessels through contractual clauses.

The European shipowners community (ECSA) has welcomed the strong support for this and also welcomed the proposal of the Parliament to create a sector-dedicated fund and to earmark 75% of the revenues generated by the shipping allowances to the energy transition of the sector.

“European shipowners welcome the increased climate ambition of the ‘Fit for 55’ package. We have criticised the lack of consistency and have put forward workable solutions. The Parliament’s vote is a strong signal that the European policy-makers listen to us and take into account the proposals of our sector. We need all hands on deck and the role of the commercial operators is key for reducing emissions. The earmarking of the revenues to shipping is a prerequisite for financing the uptake of cleaner fuels. It’s a make-or-break moment for the decarbonisation of shipping and the competitiveness of the sector,” said Sotiris Raptis, ECSA’s Secretary General.

The Parliament has also supported a proposal to address the issue of the ice-class vessels as well as special provisions for shipping in the outermost regions. In this regard, European shipowners look forward to engaging with the Parliament and the Council to reach an adequate solution.

Negotiations between the Parliament and the Council will be launched once the two institutions adopt their positions.