- EU ETS and IMO Framework Must Work Together, Says T&E.
- T&E Urges Inclusion of Smaller Ships in EU ETS.
- Ferry Route Exemptions Should End by 2028, Report Recommends.
Transport & Environment (T&E) has just put out a new briefing that calls for some important upgrades to the EU Emissions Trading System (ETS), specifically for the maritime sector. These recommendations come right before the EU’s upcoming policy review and the 2040 climate target, reports Safety4Sea.
Dual System Needed: EU ETS and IMO NZF Must Coexist
T&E stresses that the EU ETS and the IMO’s Net Zero Framework (NZF) need to work together, as neither can ensure that shipping fulfils its climate obligations on its own. While the IMO’s framework is a positive global move, it doesn’t go far enough and leaves over 85% of EU shipping emissions unaccounted for.
Even though the EU ETS is regional, it could potentially generate as much revenue (€10 billion/year) as the IMO’s global measure ($10 billion/year). T&E suggests that a portion of this revenue should be reinvested into green e-fuel production in Europe to aid decarbonization and enhance EU energy independence.
Include Smaller Ships (400–5000 GT) in the EU ETS
Currently, vessels with a gross tonnage (GT) between 400 and 5,000 are excluded from the ETS, despite playing a significant role in GHG emissions, particularly in coastal regions. T&E is advocating for their inclusion, pointing out that clean propulsion technologies—like battery-electric, hydrogen-based, and hybrid systems—are already commercially available for these ships. To strike a balance between ambition and practicality, T&E proposes a dual framework:
- ETS 2: For vessels mainly operating between EEA ports, featuring upstream carbon pricing and simplified reporting.
- ETS 1 (MRV-light): For other smaller vessels, utilising adapted monitoring, reporting, and verification to make compliance easier.
This strategy would encourage the adoption of clean technologies, cut emissions, and support a fair maritime climate policy.
Phase out ferry exemptions by 2028
Currently, ferry routes that link small EU islands to the mainland enjoy an exemption from the ETS until 2030. However, T&E believes that many of these routes could already be electrified, making this exemption a bit outdated. They suggest we start phasing out these exceptions by 2028 to match our technological advancements and environmental objectives better.
Introduce Additional Carbon Leakage Safeguards
While there’s not much solid evidence of ETS evasion so far, T&E recommends putting in place extra safeguards to deter any sneaky practices. One idea on the table is to create a container-based ETS model—similar to a Carbon Border Adjustment Mechanism (CBAM)—for certain sensitive routes.
This model would apply the ETS carbon price to entire container journeys from start to finish, especially when cargo is transhipped through non-EEA ports close to the EU. This approach would help minimize the temptation to sidestep EU regulations and safeguard EU transhipment activities. T&E also suggests lowering the current 65% transhipment threshold to bring more high-risk ports under the ETS safeguard.
Align ETS and FuelEU Maritime on Biofuel Standards
To keep our policies consistent and environmentally sound, T&E is urging the ETS to adopt FuelEU Maritime’s position on first-generation biofuels. These fuels are often associated with deforestation and biodiversity loss, so they should be excluded due to their negative environmental effects stemming from indirect land-use change.
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Source: Safety4Sea
