Fit for 55: Climate and Shipping (cepPolicyBrief)

“Ports and companies in the EU could suffer competitive disadvantages without globally noticeable CO₂ reductions. Especially in international maritime transport, unilateral measures generally have less potential to reduce GHG emissions effectively and cost-efficiently due to their limited geographical scope,” explains cep climate expert Götz Reichert, who analysed the EU plans with cep economist Martin Menner. EU-related maritime transport accounts for only about one fifth of global maritime transport emissions.

“A solo approach by the EU carries a considerable risk of evasive reactions and distortions of competition due to one-sided climate protection costs,” says Menner. In particular, the envisaged inclusion of maritime transport in the EU emissions trading scheme could entice evasion of allowance costs. Possible evasive reactions would be the slower sailing of ships or the preferential use of more efficient ships only within the scope of the allowance obligation as well as the additional or exclusive calling at ports in third countries outside the gates of the EU in order to shorten the route subject to the allowance obligation or to avoid the allowance obligation at all. “The latter would damage the competitiveness of EU ports,” warns Menner.

That is why the proposals of the Council and Parliament not to count neighbouring ports of transhipment up to 200 nautical miles away from the EU as ports of call are a step in the right direction, according to the cep experts. “This will make evasive port calls unattractive, at least for container transports,” says Menner. However, Brussels’ unilateral advance increases the risk of a failure of the negotiations on a global carbon pricing scheme at the International Maritime Organisation (IMO).

If the EU nevertheless insists on including maritime transport in emissions trading, the cep researchers believe that the definition of those obliged to hold allowances must be improved. Moreover, the obligation to surrender allowances should begin later, so as not to pre-empt the IMO negotiations.