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14. July 2021


New EU-climate plan requires CO2-quotas for shipping

In a new climate plan, the European Commission is paving the way for shipping to be a part of the EU’s Emissions Trading System (ETS), where shipping companies will have to buy CO2-quotas.

Today, the Commission presented a draft for a new climate plan. The plan contains 12 points, including transportation, which will make up the framework for how the EU will reach the target of 55 percent reduction in CO2-emissions by 2030.

“We have been waiting in anticipation for the climate plan, Fit for 55. It is a legislation package of more than 1800 pages, that we will now dive into and see what it specifically means for shipping. As a starting point, it looks very reasonable, and we feel that the contributions we, as a sector, have delivered in the preparatory work, have been heard,” says Executive Director of Security, Environment and Maritime Research, Maria Skipper Schwenn.

Shipping will contribute to a greener EU

The goal of the plan is to make the EU economy climate neutral leading up to 2050, and the plan paves the way for the partial target, Fit for 55, where reductions of greenhouse gasses must reach 55 percent already by 2030.

Shipping will, amongst other things, be part of the ETS, where companies must buy CO2-quotas, when sailing between European ports, as well as factor in half of the CO2-consumption of transportation to and from the EU.

“We support shipping being a part of the ETS, but we would have preferred that the Commission start with travels between two EU-ports. That would have made room for negotiations on global solutions at the IMO,” says Maria Skipper Schwenn and continues.

“If the EU plays its cards right, the tariffs in the proposal could be used to put pressure on the global CO2-prices at the IMO, and consequently contribute to creating unified, international solutions,” says Maria Skipper Schwenn.

Enforcement of payment of quotas

The Commission will use the definition from the EU MRV-directive (the existing system of reporting) to place the responsibility for payment of quotas under the EU ETS. This means that it is the shipowner or the technical manager, who is responsible. This ensures good avenues for enforcement, thinks Danish Shipping, who are pleased with the proposal.

“It is important that there is an easy and transparent enforcement of placement of responsibility. We are therefore very happy with the Commission’s choice of the EU MRV-directive, which we already have good experiences with,” says Maria Skipper Schwenn.

Greener fuel

Additionally, the Fit for 55-package contains elements such as FuelsEU, which will push for an increased use of greener fuels. This regulation aims at increasing the use of new fuels, such as biofuels, methanol, and hydrogen.

Finally, there is a revision of the directive for levies on fuels from 2003, which takes into account sailing between two EU-ports and provides incentive for flexible alternatives for a 10-year transitional period, starting from 2023, through the use of flexible levies. However, the proposal requires unanimity among all Member States.

“It is positive that the Commission is trying to push for the inclusion of the new fuels that are vital if the shipping industry is to reach its climate goals. We will now study the details of the proposal closer,” says Maria Skipper Schwenn.

The climate plan is a proposal and will be negotiated in both the Council and the Parliament before final adoption.