European shipping is a geopolitical asset for Europe, facilitating the export and import of goods, food and energy. While the EU represents around 15% of global GDP, the European fleet represents 34.5% of the world’s fleet in terms of global tonnage across all segments.

As the European Parliament and the Council advance their work on the Commission proposal for the EU ETS revision, European Shipowners | ECSA highlight the key amendments needed for the revision to deliver on shipping’s energy transition while safeguarding the competitiveness of European shipping.

A recent study found that shipping accounts for around 10% of EU ETS emissions but contributes almost 20% of ETS revenues. The new mechanism is an opportunity to reinvest part of this contribution in shipping’s energy transition. However, the 110 million allowances proposed by the Commission cover only a third of what is needed.

We call on the policymakers to:

• Reinvest ETS revenues in shipping’s decarbonisation. Shipping generates EUR 9 billion a year in national and EU ETS revenues. A recent study found that SMAP should be tripled from 110 million to 330 million allowances to help build a market for sustainable fuels and technologies.
• Support all technologies. SMAP’s scope should be extended and cover all technologies that deliver carbon savings, including energy efficiency projects.
• Make SMAP predictable. Predictability is essential: companies need certainty, before they take investment decisions, that the price gap between sustainable and conventional fuels and technologies will be partly covered. Companies should be able to apply for support for fuels and technologies in advance.
• Reward EU production. SMAP should incentivise the production of fuels and technologies in Europe through bonus points rather than made-in-Europe requirements.
• Earmark a dedicated envelope for shipping. The general earmarking of Member States’ ETS revenues should include a specific percentage or envelope for shipping.
• Apply one system to offshore vessels. The Commission has rightly recognised the need to change the rules applicable to offshore vessels, including the port call definition, to address unfair competition from non-EU offshore companies. However, applying one system from 2027 to 2030 and a different one from 2031 creates an unnecessary administrative burden. Only the new rules should apply.
• Maintain, extend and improve derogations. Derogations for islands, outermost regions, ice-class vessels and transnational public services/obligations must be maintained, extended and made fit for purpose to support local economies, connectivity and regional cohesion.
• Support port competitiveness without distorting competition.ES|ECSA shares the objective of keeping EU ports competitive. To maintain a level playing field across all shipping segments, the transhipment exemption should be replaced by an annual Commission report on port competitiveness and infrastructure needs. Where needed, national ETS revenues should support port infrastructure upgrades.
• Simplify the EU MRV Regulation. Simplifying the EU Monitoring, Reporting and Verification (MRV) Regulation is key to aligning the EU ETS, MRV and FuelEU Maritime, and to limiting the administrative burden on companies.

“Shipping pays almost 20% of total ETS revenues, although it accounts for only 10% of the emissions covered by the system, and, unlike other sectors, it has never received a single free allowance.
The European Parliament and the Council should at least triple the ETS revenues earmarked for SMAP to send a credible market signal for the scale-up of sustainable maritime fuels and technologies, including energy efficiency. Predictability is essential: companies need certainty, before they take investment decisions, that the price gap between sustainable and conventional fuels will be partly covered.

We strongly welcome the new provisions for offshore vessels. However, there is no justification for maintaining two consecutive and completely different reporting and compliance systems for these vessels. This significantly increases the administrative burden and undermines the competitiveness of the European offshore sector”, said Sotiris Raptis, Secretary General of European Shipowners | ECSA.