While the UN’s International Maritime Organization continues to dither on delivery’s proposals to fund maritime decarbonization utilizing some type of levy on carbon, the European Union is taking a really totally different strategy — by earmarking revenues from the EU’s Emissions Trading System (ETS) for delivery.
The European Parliament this week formally approved a reform to the ETS that, for the primary time, brings aviation and maritime into the ETS — an emission cap-and-trade system the place a restricted quantity of emission allowances – the cap – is put in the marketplace and could be traded. Under the reform, all emissions emitted by vessels of any flag calling at an EU port for voyages throughout the EU, in addition to 50% of emissions from voyages that begin or finish outdoors the EU, and all emissions at berth in EU ports, will come underneath the ETS umbrella, although there are particular provisions for ice-class vessels, small islands and outermost areas.
Significantly, the parliament additionally voted to incorporate methane and nitrous oxide along with carbon dioxide the emissions package deal, one thing which had not been included earlier than.
Here’s what’s to love in all this.
The European Community Shipowners Association (ECSA) welcomed the brand new EU ETS legislation as a result of it earmarks about EUR 2 billion of the revenues within the Innovation Fund supported by the ETS for maritime, to assist the uptake of unpolluted fuels and foster innovation.
“Addressing the climate crisis and decarbonizing shipping is not a question of ‘if’ but a question of ‘how’. Setting aside part of the ETS revenues for maritime is a victory for the energy transition of the sector. Dedicated support through the Innovation Fund is indeed key to bridge the price gap with clean fuels,” says Sotiris Raptis, ECSA’s Secretary General.
ECSA additionally welcomed the upholding of the “polluter-pays principle” by necessary necessities for the pass-through of the EU ETS prices to the industrial operators of vessels. The phase-in interval and the gradual inclusion of emissions from delivery over a three-year interval can also be essential to make sure a clean transition for the sector, says ECSA.
While the brand new ETS marks an vital step within the decarbonization of the trade, ample quantities of low- and zero-carbon fuels will should be obtainable at an reasonably priced value to keep up the trade’s international competitiveness, notes ECSA. This ought to be a high precedence of the EU’s proposed Net Zero Industry Act. As delivery is likely one of the most tough to decarbonize sectors, the upscaling of reasonably priced low- and zero-carbon fuels and applied sciences for the sector is essential.
“Shipping being a cornerstone of Europe’s energy and supply chain security, this must be properly reflected in the strategic priorities of the new Net Zero Industry Act. For this reason, we welcome the inclusion of offshore renewable technologies and carbon capture and storage in the list of strategic net-zero technologies. In addition, renewable fuels of non-biological origin (RFNBOs) should be included in the Act, so that dedicated production capacity can be swiftly developed,” added Raptis.
