The European Parliament have adopted the final EP-Council agreement for the revised EU Emissions Trading System (ETS) for shipping.

The European Sea Ports Organisation (ESPO) welcomed yesterday's Council agreement of the inclusion of maritime in the EU ETS as part of decarbonising shipping.

Europe’s ports have consistently called for an ambitious maritime EU ETS that makes the green transition of maritime possible, whilst protecting the competitiveness of European ports.

Whilst ESPO welcomes that a price tag is being put on the emissions produced by ships, the geographical scope of the EU ETS Maritime agreement could still lead to evasive port calls where shipping companies can avoid paying into the ETS by adding a call to a port outside the EU, or by reconfiguring their routes.

Evasion from the maritime EU ETS is a serious concern that continues to pose a threat to the credibility and robustness of the EU ETS for maritime. ESPO therefore calls for the Commission to start monitoring and effective prevention of carbon and business leakage from EU ETS Maritime.

Any evasion will threaten the integrity of the ETS, leading to higher emissions from longer voyages whilst failing to push shipping companies to green their operations. It will negatively affect employment and business activity in certain ports in the EU, and undermine their strategic role as hubs of transport, renewable energy, and connectivity.

Early action is crucial as changes in port traffic and the reconfiguration of shipping routes are almost impossible to reverse once they occur.

It is a positive signal that the political agreement takes the risks of evasion into account, and ESPO appreciates that the Commission will monitor and report on the impacts of EU ETS Maritime on port traffic, port evasion and traffic shift of transhipment hubs. Europe’s ports strongly support that the Commission acts as soon as evasion is identified.

ESPO also supports the co-legislators’ efforts to introduce a definition of “port of call” which excludes stops in container transhipment ports neighbouring the EU. This will however not be enough to ensure that evasion cannot take place. The changes in traffic patterns and routes should not only cover the +65% transhipment neighbouring ports but all non-EU neighbouring ports.

Finally, ESPO calls for the strategic use of revenues from EU ETS, where the decarbonisation of the sector will require significant investments in green refuelling and recharging infrastructure in ports. ESPO very much welcomes that revenues from the maritime ETS will support maritime decarbonisation through dedicated calls under the Innovation Fund, and calls for a significant part of the ETS revenues to be invested in ports in the EU via dedicated EU and national calls.

“We believe that the EU ETS maritime can be an effective instrument to boost the decarbonisation of shipping. With the current scope we fear however that shipping lines still have the choice either to go green, pay, or to divert their journey to limit or avoid the ETS charge altogether. This would have a reverse effect on emission reductions and would seriously harm the business of certain ports in Europe. The Commission must keep a serious eye on this from day one. If there is evasion taking place, the rules have to be adapted.” says Isabelle Ryckbost, ESPO Secretary General.

Ports in Europe are committed in supporting the monitoring and prevention of carbon and business leakage through the Commission taking preventive and restorative measures.

Ports in Europe have welcomed the preliminary agreement reached amongst co-legislators on the inclusion of shipping in a maritime EU Emission Trading System (EU ETS) with the final negotiations to be agreed this week.

The European Sea Ports Organisation (ESPO) finds that the maritime ETS can be an important instrument to speed up the green transition of maritime.

To deliver this, Europe’s ports call for the final text on maritime ETS to prevent carbon and business leakage, whilst ensuring that ETS revenues are made available for greening investments in maritime and ports.

For the maritime EU ETS to be a success, European Parliament and Member States in Council must make sure that the ETS safeguards the competitiveness of European ports, and avoids carbon and business leakage to ports neighbouring the EU. Whereas the wording foreseen in the preliminary agreement on excluding calls in neighbouring container transhipment ports in the calculation of the ETS charges addresses the concern of carbon and business leakage, it remains to be seen how waterproof this solution is in practice. Monitoring from day one of application is essential.

ESPO very much welcomes the agreed wording on dedicated calls for maritime under the Innovation Fund, and considers this inclusion as a red line for accepting the final agreement along with the funding commitment. These funds should be used to reduce greenhouse gas emissions, air pollution, and noise through sector-specific investments that facilitate the deployment and use of sustainable alternative fuels, including the electrification of vessels and onshore power infrastructure in ports.

For ESPO, the Innovation Fund should support the deployment of new technologies that effectively avoid generating greenhouse gas emissions, whilst bridging the funding gap for mature but not yet commercially viable projects. If only “first-of-a-kind projects” can be financed under the Innovation Fund, the added value of dedicated funding in the Innovation Fund remains very limited.

Moreover, ESPO strongly supports encouraging Member States to use the revenues generated from the auctioning of allowances for investments in maritime and ports.

"The deal reached on the maritime pillar of the ETS addresses both the concerns we have in terms of carbon and business leakage, and should ensure some funding for the heavy investments to be made to deliver the greening of shipping. A lot however will depend on the application of the provisions foreseen in this agreement. It will be of crucial importance to monitor from day one in view of identifying possible unwanted consequences at a very preliminary stage. Speeding up the greening of the shipping sector should remain the primary objective of this measure. Rerouting to ports outside the EU, or a modal shift to road are to be seen as failures of the system.", says Isabelle Ryckbost, ESPO Secretary General.

ESPO has co-signed a joint maritime industry statement supporting such investments and calling for earmarking of ETS revenues in the final text. The industry statement is attached with this press release.

European ports look forward to a final agreement on a maritime EU ETS that makes the green transition of maritime possible, whilst protecting the competitiveness of European ports.

For the final ETS statement trilogue, this can be downloaded here from ESPO.