On January 27, 2021, the European Community Shipowners’ Association (ECSA) initiated a dialogue with the European Commission and the European Parliament on the inclusion of merchant shipping in the European Union Emissions Trading Scheme (EU ETS or ETS).

ECSA proposes to define, in collaboration with the International Chamber of Shipping (ICS) and the European Union (EU), an approach considering comprehensive regulation and framework conditions for market-based-measures.

According to ECSA, maritime transport has reduced its overall GHG emissions by 7% since 2008 despite a 40% increase in traffic. This paves the way for offsetting GHG emissions for the most virtuous companies.

However, ECSA expressed concerns about the ETS:

• The great diversity of maritime markets makes it more complex to estimate targets according to the types of vessels, operators and shipowners;
• Not all shipping companies have the same capacity to meet the requirements of the ETS, particularly SMEs, in terms of the administrative and financial burden;
• An overly restrictive framework could also lead to political or commercial tensions and lead some third countries to take retaliatory measures against measures deemed discriminatory.

ECSA wishes to avoid the creation of several emission management systems. The organization therefore proposes to take into account certain aspects such as:

• Global framework based on the standards of the International Maritime Organization (IMO)
• Differentiation of actors according to their size, integrated into the ETS with proportionate measures
• Taking into account industrialists operating under unfavorable operational conditions (climatic conditions, in particular)
• No additional costs, especially for SMEs
• Take 2008 as the reference year

ECSA calls on the European Commission to:

1. Set up a fund for stakeholders to access low-carbon technologies
2. Set up a fund to support R&D efforts towards low-carbon engines
3. Consider a global model that guarantees a competitive advantage to early movers
4. Investing in infrastructures related to alternative energies
5. Geographically limit the scope of the ETS
6. Institute a phasing in the deployment of measures by limiting the scope of GHG emissions and gradually extending it to 100%

The EU insists on the efficiency of maritime transport as part of the implementation of the new ETS measures and is optimistic about this industry and its role in the decarbonation of the world economy. The EU is also willing to work with the IMO and any other organizations involved in decarbonation, but it is likely that it will not wait for a global consensus to establish the new standards of its ETS policy.

Discussions will continue in the coming months. We will stay tuned and keep you informed of the latest developments.

Denis Margot
CEO, Eolyss