WSC: Intra-EU ETS would encourage shipping’s decarbonization journey

Inclusion of shipping in the EU Emissions Trading System (EU ETS) will encourage shipping’s journey towards decarbonisation but EU action threatens to undermine broader international progress if the ETS extends outside of the EU, World Shipping Council (WSC) said.

“The EU can lead global climate action, but it can’t succeed alone. Advancing fuel-technology pathways in global shipping requires the shared commitment and cooperation of industry, governments and international regulators,” John Butler, President & CEO, commented.

“Through the ETS, the EU has a unique opportunity to strengthen, motivate and complement global policy for reducing greenhouse gas emission in international shipping.”

WSC said it supports the inclusion of the maritime sector in the EC’s proposed regional market-based approach, including both vessel owners and operators as responsible entities.

As detailed in the WSC EU ETS position paper, this design can reduce regional shipping greenhouse gas emissions by about 42% and accelerate emission reductions among non-maritime sectors as well. However, an intra-EU scope rather than the extra-regional one proposed by the commission would increase the EU’s influence on the global stage. It would provide a decisive EU example about the need to introduce a carbon price for shipping without complicating that pathway for others by overlapping with their trade.

An intra-EU scope would:

• Strengthen economic incentives for climate action and minimize the potential for carbon leakages that would undermine EU Green Deal goals.
• Position the EU as frontrunners with the ability to drive global policy through the IMO to reduce shipping’s greenhouse gas emissions internationally.
• Enhance Member State competitiveness internationally.
• Maintain coherence with the necessary supply side requirements for production and distribution of low-carbon marine fuels proposed in the Renewable Energy Directive (RED) and Alternative Fuels Infrastructure Directive (AFIR).

“If the EU goes ahead with an ETS that reaches outside its borders, it runs a serious risk of alienating non-EU countries and making it more difficult to establish global market-based measures at the IMO. Why not instead take this opportunity to both achieve the Green Deal goals and drive faster international progress through strong European leadership?” John Butler asked.

WSC member companies represent over 90% of global liner shipping industry container and roll-on roll-off carriers. Liner shipping is committed to working with the EU Institutions to achieve the Green Deal’s goals through good policy that will help achieve industry GHG reduction targets and move as fast as possible to zero emissions from international shipping.