EU Proposes Ambitious Climate Targets For Shipping, Prioritizing Low-Carbon Fuels

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  • As the European Commission plans to revise climate targets, a proposal outlines a 90% greenhouse gas emissions reduction target for shipping by 2040, aligning with IMO goals.
  • The European Community Shipowners’ Associations (ECSA) expresses support and emphasizes the importance of giving shipping priority access to low- and zero-emissions fuels.

The European Commission has unveiled a proposal for an enhanced greenhouse gas (GHG) emissions reduction target of 90% by 2040, aligning with International Maritime Organization (IMO) targets. This move comes as shipping faces its initial carbon tax compliance deadline.

ECSA’s Support

The European Community Shipowners’ Associations (ECSA) backs the EU Commission’s consideration of separate targets for shipping, mirroring the IMO GHG strategy agreed upon in July 2023. The IMO’s strategy aims for net-zero emissions from the industry by 2050, with intermediate targets, including a 70-80% reduction by 2040.

ECSA Secretary General Sotiris Raptis sees this as strong support for the IMO and a step towards ensuring a level playing field for European shipping.

Commitment to Low-Carbon Fuels

ECSA welcomes the Commission’s commitment to addressing barriers hindering the deployment of low- and zero-emissions fuels, including e-fuels and advanced biofuels. The shipping sector is slated for priority access to these fuels over other industries with alternative decarbonization solutions.

Acknowledging the cost challenge of sustainable fuels, the EU Commission aims to consider regulatory measures to encourage their production, with ECSA advocating for requirements for fuel suppliers to make these fuels available in the market.

Immediate Action and ETS Revenues

ECSA looks forward to collaborating with the EU Commission to translate the commitment into immediate action. Leveraging shipping’s designated EU Emissions Trading Scheme (ETS) revenues from the Innovation Fund is highlighted, emphasizing the importance of supporting the competitiveness of shipping.

EU ETS Carbon Tax Scheme

The EU Commission has published a list of administering authorities for the EU ETS carbon tax scheme. Shipping companies have a 40-day deadline to choose an EU country for their “maritime operator holding accounts” (MOHAs) under the ETS. MOHAs facilitate emissions allowances compliance, annual greenhouse gas emissions tracking, and EUAs trading.

Enforcement and Compliance

Law firm Watson Farley & Williams (WFW) notes that only one EU member state has completed the task of transposing relevant EU legislation into national laws. Companies failing to register properly may face enforcement actions, and WFW advises entities to verify their identification on the published list.

The EU’s move to bring the shipping sector into its carbon tax scheme demonstrates a commitment to environmental sustainability, with ongoing efforts to navigate regulatory complexities in the maritime industry.

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Source: Riviera

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