EU Parlement Votes to Include Shipping in EU Carbon Market

After an inconclusive EU Parliament session two weeks ago, yesterday the EU Parliament has voted in favor of including shipping in its carbon market. The European Parliament's text includes:

The surrendering of allowances by shipping companies should be fully implemented from 2024, From 2027 onwards, the extension of the EU ETS to the maritime transport sector should thus include emissions from voyages to and from third countries, while providing for derogations in relation to half of the emissions from ships performing voyages arriving at a port under the jurisdiction of a Member State from a port outside the jurisdiction of a Member State, half of the emissions from ships performing voyages departing from a port under the jurisdiction of a Member State and arriving at a port outside the jurisdiction of a Member State under strict conditions, in particular where a third country has a carbon pricing mechanism in place

The person or organization responsible for the compliance with the EU ETS should be the shipping company, The polluter pays principle is going to be applied but needs to be respected. A binding clause should be included in such arrangements for the purpose of passing on the costs so that the entity that is ultimately responsible for the decisions affecting the greenhouse gas emissions of the ship is held accountable for covering the compliance costs paid by the shipping company.

An Ocean Fund is going to be established from revenues generated from the auctioning of allowances in respect of maritime transport activities under the EU ETS. The funds should be invested to improve the energy efficiency of ships and to help the decarbonization of the industry.

In order to reduce the administrative burden on shipping companies, one Member State should be responsible for each shipping company. For shipping companies registered in a Member State, the administering authority should be that Member State. For shipping companies registered in a third country, the administering authority should be the Member State in which the shipping company had the greatest estimated number of port calls from voyages falling within the scope of Directive 2003/87/EC in the last two monitoring years.

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