European Parliament's environment committee went beyind looking at aligning the MRV and the IDC last week, it said it wants shipping in the ETS too. So does the European Commission President, but there's still lots of steps to be taken.
Brussels took another small, but significant step towards bringing shipping into a regional market-based measure last week. It was the European Parliament’s environment committee that voted on Tuesday 7th July to include emissions from the maritime sector in the EU emissions trading scheme (ETS). The ETS is due for one of its periodical updates, this one its fourth, and will begin in 2021.
The decision ties in with the now mandatory emissions reporting requirements that all vessels calling at European ports have to comply with. The first full year of reporting has now been completed and the European Commission has issued its statistics for 2019. But here it has to be remembered that the European bloc is made of three distinct entities- the Commission, the Parliament and the Council. For a new shipping regulation to be written, agreed and made law then it needs to pass through and be approved by all three entities.
Additionally this vote by the European Parliament’s environment committee needs to be voted on by the whole Parliament during a plenary vote. There is still al long way to go politically for shipping to be included in the next phase of the ETS, but it is certainly far from impossible. The environmental committee vote was 62 votes in favour, three against and 13 abstentions. The vote was in principal about aligning the EU MRV with the IMO’s data collection requirement because there are currently two fuel/emissions data collection requirements on shipowners that remain incompatible despite both having the same long-term objective.
More than the ETS
The drive behind this recent push in the European Parliament is Green MEP Jutta Paulus, who in a press release from the Parliament said: “We are sending a strong signal in line with the European Green Deal and the climate emergency: Monitoring and reporting CO2 emissions is important, but statistics alone do not save a single gram of greenhouse gas! That’s why we are going further than the Commission proposal and demanding tougher measures to reduce emissions from maritime shipping”.
The proposal does not just suggest pushing shipping into the ETS and having individual ships or ship owners trade with other European entities already in the scheme. EP Environment committee wants to have an “Ocean Fund” established from 2023 to 2030, financed by revenues from auctioning off allowances under the ETS. The fund would be used to “make ships more energy efficient and to support investment in innovative technologies and infrastructure, such as alternative fuel and green ports, to decarbonise the maritime transport sector.” It also wants 20% of the funds to be used on marine ecosystems impacted by climate change.
Next (small) steps
The proposal by the environment committee will be voted on during a plenary meeting of the Parliament planned for mid-September, following which there will be dialogue with the member states and then the Commission and Council of Ministers. While this remains a single step, it is being hailed as significant move by the Green Lobby Groups in Europe. In a press statement from Transport and Environment, Faïg Abbasov, shipping manager wrote: “MEPs have delivered a wake-up call to the European Commission, which has focused too much on biofuels and hardly at all on making shipping pay for its pollution. It should follow through on bringing the sector into the EU carbon market and stop dragging its heels on operational CO2 standards, which are essential to making hydrogen ships cost-effective.”
Shipping now has to wait and see how the Parliament will vote in plenary, and then see how the Commission will respond. New Commission president Ursula von der Leyen stated early on in her role that she sees shipping being brought into the ETS. She is also pushing forward her Green Deal with a focus on hydrogen economies, notably for sectors such as transport which are hard to decarbonise.