EU emissions trading ESPO comments

On 18 April 2023, the European Parliament adopted the final EP-Council agreement for the revised EU Emissions Trading System (ETS).

The European Sea Ports Organisation (ESPO) welcomes the inclusion of maritime in the EU ETS as part of decarbonising shipping. Europe’s ports have consistently called for an ambitious maritime EU ETS that makes the green transition of maritime possible, whilst protecting the competitiveness of European ports. This was reported by ESPO in mid-April.

Potential for evasion

Whilst ESPO welcomes that a price tag is being put on the emissions produced by ships, the geographical scope of the EU ETS Maritime agreement could still lead to evasive port calls where shipping companies can avoid paying into the ETS by adding a call to a port outside the EU, or by reconfiguring their routes.

Evasion from the maritime EU ETS is a serious concern that continues to pose a threat to the credibility and robustness of the EU ETS for maritime. ESPO therefore calls for the EU through its Commission to start monitoring and  prevention of carbon and business leakage from EU ETS Maritime.

It is understood that any evasion will threaten the integrity of the ETS, leading to higher emissions from longer voyages whilst failing to push shipping companies to green their operations. It will negatively affect employment and business activity in certain ports in the EU, and undermine their strategic role as hubs of transport, renewable energy, and connectivity.

Early action is crucial as changes in port traffic and the reconfiguration of shipping routes are almost impossible to reverse once they occur, mit is understood.

It is a positive signal that the political agreement takes the risks of evasion into account, and ESPO appreciates that the Commission will monitor and report on the impacts of EU ETS Maritime on port traffic, port evasion and traffic shift of transhipment hubs. Europe’s ports strongly support that the European Commission acts as soon as evasion is identified.

ESPO also supports the co-legislators’ efforts to introduce a definition of ‘port of call’  which excludes stops in container transhipment ports neighbouring the EU. This will however not be enough to ensure that evasion cannot take place. The changes in traffic patterns and routes should not only cover the +65% transhipment neighbouring ports but all non-EU neighbouring ports.

Ports’ infrastructure investment needs

Finally, ESPO calls for the strategic use of revenues from EU ETS, where the decarbonisation of the sector will require significant investments in green refuelling and recharging infrastructure in ports. ESPO very much welcomes that revenues from the maritime ETS will support maritime decarbonisation through dedicated calls under the Innovation Fund, and calls for a significant part of the ETS revenues to be invested in ports in the EU via dedicated EU and national calls.

ESPO SG writes

Isabelle Ryckbost, ESPO Secretary General, commented: ‘We believe that the EU ETS maritime can be an effective instrument to boost the decarbonisation of shipping. With the current scope we fear however that shipping lines still have the choice either to go green, or to divert their journey to limit or avoid the ETS charge altogether.

‘This would have a reverse effect on emission reductions and would seriously harm the business of certain ports in Europe. The Commission must keep a serious eye on this from day one. If there is evasion taking place, the rules have to be adapted.’

Ports in Europe are committed in supporting the monitoring and prevention of carbon and business leakage through the Commission taking preventive and restorative measures.