The World Shipping Council (WSC) acknowledged the important milestone that has been reached following the adoption of the European Parliament’s position on the EU ETS proposal, but called for further improvements.
WSC urged the EU institutions to work together in the trilogue process to ensure that EU ETS provides the correct market signals for decarbonising the shipping industry in support of the EU Green Deal GHG goals.
It specifically recognises the commitment of the European Parliament to strengthen the EU’s climate ambitions through the reform of the EU ETS. However, the Parliament position on the responsible entity presents a loophole to shield shipowners with a mandatory contractual pass through of costs to operators, delaying innovation, as it says.
Rapid investment in green vessels and fuels requires that EU ETS engage all parties – vessel operators, charterers, and shipowners. Legislation that is narrow and includes binding-pass through clauses will distort the market signal and delay progress to reduce greenhouse gas emissions
explained John Butler, President & CEO of WSC.
WSC also added that the payment of EU ETS compliance costs should be determined by the contracting parties themselves, as negotiating the shared challenge of decarbonisation would be best achieved without contractual terms imposed by legislation.
We urge the co-legislators in the upcoming trilogue process to remove the binding contract requirement. WSC stands ready to further engage with the EU institutions to ensure that the reform of the EU ETS is ambitious, effective and practical
WSC concluded.
The European Parliament has voted in favour of including all ships above 400 gross tonnage and offshore vessels in the EU’s carbon market. Polluters will have to pay for all greenhouse gases they pollute when sailing within the EU and 50% of voyages outside of the bloc until 2027.
After 2027, the scope of the carbon market will be automatically extended to 100% of ships entering and leaving European ports. Lawmakers did however bow to pressure by including exemptions for ice-going ships and ships traveling to outermost regions, delaying the decarbonisation of these vessels.
