Seatrade-Maritime: EU ETS review must protect shipping competitiveness, says ECSA

Published by Seatrade-Maritime

As the European Commission (EC) is due to publish its review of the Emissions Trading System (ETS) on 17 July, European shipowners have called for fair treatment for the bloc’s shipping sector under the carbon tax.

The European Community Shipowners Association (ECSA) highlighted statistics demonstrating the sector’s importance: the European Union (EU) represents about 15% of global GDP but its shipowners operate one of the largest fleets in the world – close to 35% of the fleet in tonnage terms.

Specifically, European shipowners are calling for:

• An IMO review clause clearly stating that EU legislation will be reviewed and then withdrawn once a global agreement is adopted at the IMO – avoiding double regulation and double payments.

• ETS revenues to be earmarked to invest in clean tech and fuels. Shipping generates €9bn annually in revenues but although the money is distributed to member states, only a percentage is assigned to marine and shipping-related projects. Shipowners want member states to use the money to boost the availability of sustainable fuels and support clean-tech projects.

• Meaningful support for sustainable fuels. Sustainable fuels are, on average, four times more expensive that shipping’s conventional fuels. Shipowners want the ETS to cover as much as possible of this enormous differential. They cite the aviation model as a basis, a sector in which the existing ETS sets aside 20m allowances worth about €1.5bn to distribute to airlines.

• Broad support for clean tech projects. The EC proposal on the Industrial Accelerator Act specifies net-zero technologies that improve energy efficiency and generate immediate emission savings. All clean technologies and energy efficiency projects should be supported, the owners say.

• Safeguarding the level playing field. Any proposal to support the competitiveness of EU ports should ensure the integrity of the system and maintain a level playing field across all shipping sectors.

• Make derogations for islands, outermost regions and ice-classed ships automatic, mandatory, and fit for purpose.

• Simplified reporting requirements thorugh the alignment of EU ETS and FuelEU Maritime reporting obligations.

Experts believe that the EC’s review on Friday could well be a defining moment for European climate and industrial policy. It has been the subject of intense lobbying in recent months as member states, industry groups, politicians, and others seek to balance a fair and realistic industrial decarbonisation trajectory with the bloc’s broader climate targets.