World Shipping Council denounces E.U.’s Emissions Trading System plans

The World Shipping Council has raised “serious concerns” for maritime trade and global efforts to reduce greenhouse gas emissions if the E.U. expands its Emissions Trading System (ETS) to include international shipping.

In July, the European Parliament’s environment committee voted to include CO2 emissions from the maritime sector in the E.U. ETS and the E.U. Commission has also voiced support of the plan. This is part of the broader Green Deal discussions within the E.U. about what regulatory and financial mechanisms will be used to address greenhouse gas (GHG) emissions from maritime shipping.

The E.U. ETS has been described as a “regional” system, but bringing international shipping into that system using the MRV scope would regulate the operation of ships on several of the world’s seas and oceans, including on the high seas and in waters adjacent to non-E.U. nations.

The paper indicates that while CO2 allocations for shipping are as yet unknown, if one uses a carbon price of €25 per tonne of CO2 generated in 2018, the ETS would impose trade costs of roughly €3.45 billion in a single year. Put differently, one sector would account for up to 25% of the total 2018 ETS revenues.

The council said that the geographic scope is the same as the MRV GHG reporting regime, the system would also cover significant cargo volumes that are not part of E.U. trade at all, but are transshipped through E.U. ports.

This would include numerous less-developed countries (LDCs) that would face an extra charge on their trade simply because their goods are routed through the E.U. A charge would be levied first on the cargo as it sails into an E.U. port and then again as the same cargo leaves the E.U. on another vessel to its ultimate destination.

For more information visit www.worldshipping.org

14th September 2020