Monday, December 11, 2023

The maritime sector seeks ways to decarbonize

Maritime transport is responsible for about 4% of greenhouse gas emissions in the European Union (EU). The plans to achieve the objective set by the European Council of reducing all emissions by 55% – compared to 1990 levels – between now and 2030 include the inclusion in 2024 of the maritime sector in the Community Emissions Trading Scheme (EU ETS), the world’s largest emissions trading system.

The measure, which facilitates a transition period, seeks to make operators pay for ship emissions that exceed a set maximum, to decarbonize the sector and accelerate the implementation of more sustainable technologies among shipping companies.

Following a review by the Council and Parliament, ships over 5,000 tonnes (cargo ships, cruise ships, tankers, military tankers and large yachts) will enter the emissions market next year. The review establishes that only half of the emissions generated on routes that connect European ports with destinations outside the EU will be paid for, while 100% will be counted for connections within the EU.

The application will also be gradual: next year it will be paid for 40% of emissions, in 2025 for 70% of those emitted on connections within the EU and, in 2026, for 100%. That year, other pollutants will be included in the calculation, such as methane (CH4) and nitrous oxides (N2O). Finally, in 2027 it is planned to include large vessels of more than 5,000 tons for offshore services, which provide services and support in offshore operations, especially in the oil and gas industry, marine renewable energy and other underwater activities.

The emissions rights payments received will be allocated to the EU Social Climate Fund (SCF), to facilitate the energy transition for citizens and microbusinesses. This mechanism will be added to the Modernization Fund already underway, which allocates money collected in the emissions rights market to EU member countries to speed up their path towards climate neutrality; and the Innovation Fund, which promotes innovative low-carbon technologies.

However, the sector considers that “although the extension of the emissions rights market (EU ETS) to maritime transport will help decarbonise the economy and accelerate the implementation of more sustainable technologies”at the same time indicates that “some adverse effects could appear, since this policy will not be applied on a global scale”. This is supported by the Transport Innovation Center (CENIT), located in Barcelona and specialized in logistics and transport challenges, which has carried out an analysis of possible evasion mechanisms on behalf of State Ports.

According to researchers Javier Garrido, Marici Hervàs and Chiara Saragani, route operators from America and Asia can choose to head to North Africa, towards Tangier, Nador, Alexandria or “future new transshipment centers that would maintain a competitive advantage”. In this way, companies would only pay the emissions costs of shorter routes between these new stops and the final port in the EU, since the EU ETS only applies at European maritime borders. It would be a reconfiguration of routes that would save costs for shipping companies and lead to the so-called “carbon leak”, a transfer of emissions from a specific country to other regions with an absence of climate policy.

The EU is working to ensure that the standard is accepted internationally, in line with what was proposed in 2015 by the International Maritime Organization (IMO), to prevent tax evasion and for shipping companies to focus their resources on more sustainable solutions and not so much in new strategic logistics centers. “The European Union should take a more insistent approach with the IMO and try to exert more pressure to extend the EU ETS to all countries”emphasize the CENIT experts.

They also prescribe as a solution to promote research into innovative solutions that could help accelerate the clean energy implementation process, “such as financing for the renewal of fleets with more sustainable ships, thus generating benefits for both the environment and the shipping business”. In this way, the reluctance of the companies involved to assume the carbon tax is reduced. Precisely, along these lines, it has been defined that 75% of the money raised is allocated to funds to promote innovation in the transition to a more energy-efficient and climate-resilient European maritime sector.

AUTHOR: Gloria Ayuso


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