The European Commission (EC) has adopted a report on the implementation of the EU Emissions Trading System (ETS) for shipping that indicates there was no evidence of major changes in the market that might indicate it was being gamed.
The EU ETS was extended to include maritime transport from January 1st 2024.The new report provides an initial analysis of the impact of this change.
The report’s analysis of shipping traffic data did not show evidence of a general trend in relocation of container transhipment activities, nor did it detect any clear evidence suggesting that shipping companies were adding extra stops at neighbouring non-EU ports.
The data provided no evidence of a modal shift towards road transport or an increase in the use of smaller ships, two things which could have suggested a change in behaviour to avoid the impact of the introduction of EU ETS to the maritime sector.
Forward-looking indicators, including route announcements and planned investments in ports, revealed no discernible trends indicating a general change in market behaviour, although it did accept that there had been a few isolated cases of potential circumvention. The report found no evidence of reduced shipping services to EU islands or outermost regions.
The EC has also adopted another maritime report assessing the potential inclusion of small ships between 400 gt and 5,000 gt under the scope of the EU regulation for the Monitoring, Reporting and Verification (MRV) of maritime GHG emissions.
The analysis identified that more than 5,300 smaller vessels – emitting around 11m tonnes of CO2 every year – were not currently covered by the legislation. The report said that including these ships could increase the amount of emissions covered by the legislation by around 9%, while expanding the number of regulated ships by around 42%.
The recurring annual MRV-related administrative costs for smaller vessels were projected to be similar, if not slightly higher, than for larger vessels. Consequently, the balance between administrative costs and additional monitored GHG emissions was less favourable for smaller ships.
The report notes that the net present value (NPV) of additional administrative costs for companies and competent authorities was higher than the monetary potential of GHG emission savings attributable to the MRV maritime Regulation alone.
However the analysis suggested that these findings could shift if the GHG emission savings from the possible integration of smaller vessels in other GHG mitigation policies, such as the EU ETS and FuelEU, were considered.
An assessment of these potential additional benefits will be considered in the context of the 2026 review of the EU ETS Directive.