EU Emissions Trading System

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EU targets and policies for shipping industry to reduce carbon emissions

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  • Author: Panos Mouratidis

On 16 September 2020, MEPs voted to include maritime transport in the EU’s Emissions Trading System  and binding requirements for shipping operators to reduce their CO2 emissions by at least 40% by 2030.

On 27 April 2021, the Parliament reiterated the need of cutting emissions by the shipping industry and its inclusion in the EU’s Emissions Trading System. The Commission proposed in July 2021 an update of the Emissions Trading System, including an extension to cover maritime transport, as requested by the Parliament.

In December 2022, Parliament and the Council reached a provisional agreement on its inclusion in the Emissions Trading System, which was approved by Parliament in April 2023. Additional, the Council and the European Parliament reached a provisional agreement in March 2023, related to Fuel EU maritime proposal.

On 10 May 2023, the new Regulation 2023/957 (amending regulation EU 2015/757) provides the inclusion of maritime transport activities in the EU emissions trading system and for the monitoring, reporting and verification of emissions of additional greenhouse gases and emissions from additional ship types. The European union council and parliament have agreed amendments to include shipping in the EU emissions trading system (eu-ets) from 1 January 2024.

More specific, MEPs succeeded in ensuring that ships will have to gradually reduce greenhouse gas (GHG) emissions by cutting the amount of GHG in the energy they use (below 2020 level of 91.16 grams of CO2 per MJ) by 2% as of 2025, 6% as of 2030, 14,5% as of 2035, 31% as of 2040, 62% as of 2045 and 80% as of 2050. Containerships and passenger ships will be obliged to use on-shore power supply for all electricity needs while moored at the quayside in major EU ports as of 2030. It will also apply to the rest of EU ports as of 2035, if these ports have an on-shore power supply.                                                                                                               

Even if carbon dioxide (CO2) emissions represent the large majority of greenhouse gas emissions from maritime transport, methane (CH4)  and nitrous oxide (N2O) emissions represent a relevant share of such emissions. The inclusion of CH4 and N2O emissions in Regulation (EU) 2015/757 would be beneficial for environmental integrity and incentivising good practices, and should apply from 2024.

General cargo ships below 5 000 gross tonnage but not below 400 gross tonnage represent a significant share of greenhouse gas emissions of all general cargo ships. To increase the environmental effectiveness of the monitoring, reporting and verification system, ensure a level-playing field and reduce the risk of circumvention, general cargo ships below 5 000 gross tonnage but not below 400 gross tonnage should be included in Regulation (EU) 2015/757 from 2025.

Offshore ships emit a relevant share of greenhouse gas emissions. The related  regulation should also apply to offshore ships of 400 gross tonnage and above from 2025. The Commission should assess before 31 December 2024 whether additional ship types below 5 000 gross tonnage but not below 400 gross tonnage should be included in Regulation (EU) 2015/757.

In future time, Council Committee of Permanent Representatives and Parliament’s Transport and Tourism Committee will be deal on sustainable maritime fuels rules for final approval.

Source: www.europarl.europa.eu

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