Study Reveals Exclusions in EU Carbon Market Proposal for Shipping Sector

The European Commission’s proposal to include the shipping sector in the European Union Emissions Trading System (EU ETS) has faced criticism from the environmental group Transport & Environment (T&E). According to their study, the proposal contains exclusions for small commercial and military vessels, leaving millions of tonnes of CO2 emissions unregulated. T&E argues that these exclusions are too lenient and calls for a revaluation of the EU’s shipping laws.

Exclusions in the Proposal:
Under the proposed regulations, ship owners would be required to purchase permits under the EU ETS or face potential bans from EU ports. However, the proposal excludes ships below 5,000 gross tonnages (GT), including small offshore supply ships and fishing and military vessels. Transport & Environment’s analysis estimates that these exclusions would result in approximately 25.8 million tonnes of CO2 emissions escaping regulation, accounting for roughly 20% of the total emissions from shipping in the EU.

Call for Rethinking Shipping Laws:
Transport & Environment asserts that the proposed exclusions are too broad and encompass many heavily polluting vessels, undermining the effectiveness of the EU’s efforts to address emissions from the shipping sector. They argue that the EU must reconsider its approach to ensure comprehensive coverage of emissions from the industry.

European Commission’s Perspective:
An official from the European Commission defended the 5,000 GT threshold, explaining that it aimed to strike a balance between minimizing administrative burden for companies and including most of the greenhouse gas (GHG) emissions from the sector. The Commission also stated that its proposal aligned with the emissions covered by the existing regulation on monitoring, reporting, and verification (MRV) of emissions from maritime transport. Vessels above 5,000 GT account for a significant portion of vessels calling into EU ports and their associated emissions.

Future Outlook:
The shipping sector is expected to be included in the EU ETS starting in 2023, with a phased implementation over three years. As shipping accounts for nearly 3% of global CO2 emissions and around 90% of world trade, the inclusion in the EU ETS is a significant step towards addressing emissions from this sector. However, the need to address exclusions and ensure comprehensive coverage remains a crucial challenge for the EU in its efforts to regulate shipping emissions effectively.