More than 25 million tonnes of CO2 are exempt from the EU’s proposed carbon price for shipping, according to a new Transport & Environment (T&E) study.
As the study says, arbitrary exemptions of ships such as those servicing oil and gas facilities, as well as yachts, will undermine the EU’s shipping law and let millions of tonnes of emissions off the hook.
In July 2021, the European Commission published a set of proposals to decarbonise the maritime sector. However, the proposed carbon pricing scheme (ETS) and the low GHG fuel standard (FuelEU Maritime) will only apply to ships above 5,000 GT and exclude a number of ship types such as offshore vessels, fishing vessels and yachts.
This study has therefore taken data on maritime emissions in Europe in 2019 from Marine Benchmark to investigate the emissions from vessels under 5,000 GT and in segments not covered by the EU’s Monitoring, Reporting and Verification (MRV) Regulation.
Ships under 5,000 GT make up a total of 19.7 MtCO2, while 16.1 MtCO2 is exempted from ships of all sizes in segments not covered by the MRV, including offshore, service, yacht and vessels classed by Marine Benchmark as ‘miscellaneous’, mostly meaning military vessels.
In particular, the exemption of 8.0 MtCO2 from offshore ships “is shown to be surprising given the high average emissions per vessel in this segment compared to bulk carriers and tankers.”
Similarly, ships just below the 5,000 GT threshold are shown to have higher average emissions and engine propulsion power than ships just above the threshold.
The European Commission justified its choice of the size threshold on the basis of administrative burden, claiming that it would exempt 45% of ships that operate in Europe but only 10% of emissions. However, the study noted that it has found that:
Total exemptions under 5,000 GT equate to 15% of total emissions from all vessels as per the proposed ETS geographical scope, with total emissions exempted almost 20% of total maritime emissions
Moreover, the current threshold proposal is “untenable for its unintended climate effects.” For this reason, T&E notes that as a bare minimum, policy-makers should reduce the threshold to 400 GT and include offshore vessels in the shipping proposals.
To further reduce administrative burden on vessels that do not operate much each year, policy-makers could consider a carbon threshold whereby vessels above 400 GT are only obliged to comply with the EU’s ETS if they report more than 1,000 tCO2 in the previous year’s MRV
In light of these findings, Transport & Environment recommends the EU policy-makers to amend the threshold in all relevant shipping proposals to 400 GT.
They also suggest policy-makers should to end the exemptions for other ship types “but most importantly offshore vessels.”
Finally, policy-makers could also consider a carbon threshold where only vessels polluting more than 1,000 tCO2/year are obligated to surrender allowances under the ETS.
