The European Parliament has voted to extend the EU Emissions Trading Scheme (ETS) to the shipping sector – which currently pays nothing to emit CO2.
Here are the key elements of the package
- To include shipping in the ETS from 2022 under full MRV (Monitoring, Reporting and Verification) scope, no free allowances.
- 40% carbon intensity improvement by 2030 (compared to 2018 baseline)
- To extend the scope of EU MRV to cover all GHG, specifically CH4 (methane)
- Modify MRV from TTW (tank to wake) to WTW (well to wake) = LCA
- Zero-emissions berth standard by 2030 (all ships)
- More transparency for the MRV, all reported data, incl. total distance sailed, transport work, shipowner name, ship-operator name, etc, fuel use by type, all to be published.
- This will need to be negotiated with the member states to become a law.
- There are also forthcoming proposals from the EC touching the same issues. This campaign in the Parliament now gives the high ambition context to the Commission proposals, and should get member states to accept at least the principle of EU regulation of shipping emissions.
The shipping industry’s global carbon emissions have grown 10% in just six years and could increase 50% by 2050 if real action is not taken. (IMO 4th GHG study, 2020) This is mainly because maritime trade has grown more quickly than the efficiency of ships has improved.
Ships sailing to and from Europe emitted more than 139 million tonnes of CO2 in 2018. If shipping were a country it would be the EU’s 8th biggest emitter after the Netherlands. Shipping is the only sector with no binding measures to reduce its carbon emissions in the EU, and still does not pay for its carbon pollution. The sector is exempt under EU law from paying any tax on its fuel, an effective subsidy worth €24 billion a year.
A container line, the Mediterranean Shipping Company (MSC) overtook airline Ryanair in the top 10 rankings of Europe’s biggest carbon dioxide emitters in 2019, a list that is still dominated by big coal-fired power plants, European Union data showed.
The World Shipping Council, which includes the 10 largest container shipping lines, lobbied against the ETS applying to shipping, especially to voyages extending outside EU territorial waters, arguing a regional regulation would hinder action at a global level, i.e. the UN’s International Maritime Organisation.