EU governments carving out €20 bn in carbon market exemptions for shipping

(Transport and Environment, 21 Sep 2022) Exemptions would reduce the potential of EU carbon market to fund green shipping transition.

Government ministers are in the process of carving out €20 billion worth of exemptions for the shipping industry in the new maritime carbon market (ETS), according to a new analysis. Transport & (T&E), who carried out the report, calls on governments to put the polluter pays principle first and end unwarranted giveaways to an industry with a poor environmental record.

Last year, the European Commission announced the landmark decision to bring shipping into the EU’s carbon market. The proposal is now in the trilogue phase where national governments thrash out the final details of the proposal with the Commission and European Parliament.

Governments want to gradually phase-in (when the carbon market fully kicks in) the ETS, whereas the EU Parliament proposed to start the scheme in 2023 without a phase-in. If scrapped, as per the Parliament proposal, emissions coverage would increase by 154 MtCO2 over seven years.

Jacob Armstrong, sustainable shipping officer at T&E, said: “The ETS is a landmark opportunity to tax pollution from vessels and use that money to fund shipping’s decarbonisation. A delayed phase-in of the carbon market for shipping instead risks handing a large, unwarranted subsidy to big business.”

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Transport and Environment, 21 Sep 2022: EU governments carving out €20 bn in carbon market exemptions for shipping