Study for the Air Pollution and Climate Secretariat (AirClim) and the Life ETX Consortium
This policy brief provides an overview of the proposal by the European Commission to reform the EU ETS from July 2021. The proposal foresees the extension of the existing EU ETS to maritime transport by amending the Emissions Trading Directive (Directive 2003/87/EC) and by adjusting the EU MRV Regulation (2015/757). The proposal is part of the Fit-for-55 package, which also includes other proposals addressing the maritime sector, such as the FuelEU Maritime Initiative. Our policy brief outlines the importance of addressing maritime transport emissions, evaluates the proposal and puts it into context with developments on a global level.
Expanding the EU ETS to include maritime transport is an important step, which introduces carbon pricing in this sector and signals the relevance of its emissions to the EU’s overall emissions and to the economy.
The current proposal could be improved by:
- including all relevant GHGs (CO2, CH4 and N2O), and possibly also black carbon;
- considering a step-wise inclusion of ships over 400 GT in a timely manner;
- considering whether an expansion of the geographical scope is politically feasible
The inclusion of international maritime transport in the EU NDC with the geographical scope of the maritime EU ETS could underscore the EU’s ambition to reduce emissions and strengthen links between efforts under IMO and UNFCCC. The EU’s forerunner role could serve as an incentive and proof-of-concept for an international policy.