Parliament votes EU ETS ship inclusion

The European Parliament today voted for the inclusion of greenhouse gas (GHG) emissions from ships over 5,000 gross tonnes in the emissions trading system (EU ETS) by 1 January 2022. Parliament also wants firms to cut ships' annual average CO2 emissions by more than 40pc by 2030.

The vote confirms the position taken by the parliament's environment committee in July when adopting a draft legal report for a regulation on monitoring, reporting and verification of CO2 emissions from shipping.

Parliament also voted to include methane emissions in the monitoring and reporting obligation. And it called for 50pc of revenues from the sale of EU ETS allowances to the maritime sector to be used for an Ocean Fund, established for the period 2022-2030 to improve the energy efficiency of ships and support investment in decarbonisation.

An additional amendment adopted would oblige the commission, if also agreed to by EU member states, to propose by 31 December 2022 "additional requirements to reduce GHG emissions other than CO2, as well as to reduce air pollutants and the discharge of wastewater, including from scrubbers, into open waters from ships". And the review should also "consider" an extension of the scope of the regulation to include ships of 400-5,000 gross tonnage.

Under the proposed regulation, the commission would be given powers to determine the baseline for annual emission reduction factors for each ship category, as well as rules and means for calculating and collecting excess emissions penalties. The text adopted by parliament calls for firms to "linearly reduce the annual CO2 emissions per transport work by at least 40pc by 2030 as an average across all ships under their responsibility, compared to the average performance per category of ships of the same size and type".

To become law, parliament must negotiate a final legal text with EU member states. Draftswoman Jutta Paulus has suggested that negotiations may only begin next year as Germany, which is currently chairing meetings of EU member states, is focusing on agreeing a European climate law and the EU's long-term budget.

Addressing parliament, EU commissioner Johannes Hahn opposed using the regulation on monitoring, reporting and verification of ship CO2 emissions to include shipping in the EU ETS and to set a 40pc GHG cut as going beyond the aims of the commission's original proposal to align the EU with global data collection systems.

"But our goals are shared. The commission has already announced its intention to extend the ETS to maritime sectors," said Hahn.

Paulus explained the GHG goal as obliging 2030 emissions to be under 40pc of average fleet emissions today.

"That means first movers, who have already done something and whose ships are much more efficient, have much less to do. And if you don't want to make the investments then you can simply go slower," said Paulus.

"There are also many other possibilities — methanol, ammonia — that are waiting for a signal for the maritime sector to be included in the ETS. Only then would it be worthwhile," Paulus said.

The commission is set to announce a revision of the EU's GHG emissions reduction target for 2030 upwards from 40pc to 55pc. It also seeks to include "at least" intra-EU maritime transport in the EU ETS.

European leaders, too, have supported financing the EU's budget with revenues from the extension of the EU ETS to both the aviation and maritime sectors.

By Dafydd ab Iago