Strengthening the Maritime ETS to Prevent Carbon Leakage

In a move to bolster the European Union's Maritime Emissions Trading System (ETS), a new briefing from Transport & Environment (T&E) outlines targeted regulatory adjustments to prevent 'evasive' port calls that could undermine the system's effectiveness. The Maritime ETS, set to take effect in 2024, aims to reduce greenhouse gas emissions from the shipping industry. However, the T&E briefing highlights a potential risk of 'carbon leakage' through 'evasive' port calls, where ships may bypass ETS-covered ports in favor of non-covered ports to avoid the carbon pricing mechanism. 'Evasive' port calls can threaten the ETS's ability to drive emissions reductions across the maritime sector, according to the briefing. To address this, T&E proposes expanding the ETS to cover smaller ships and implementing a 'port call' criterion that would require ships to pay for emissions from all their EU port visits, not just those within the ETS coverage. 'There is no room for evasion if we want the Maritime ETS to be effective in cutting shipping emissions,' said Jacob Armstrong, sustainable shipping officer at T&E. 'Policymakers must close the loopholes that could allow ships to avoid the carbon price.' The briefing also emphasizes the need to maintain a level playing field for European ports and shipping companies, noting that 'carbon leakage risks undermining both the climate impact and the competitiveness of the Maritime ETS.' As the EU continues to refine its policies to decarbonize the maritime sector, addressing potential loopholes and ensuring the integrity of the ETS will be crucial to protecting the climate and preserving the industry's competitiveness.