The European Commission presented recently its review of the EU Emissions Trading System, the EU ETS. The new proposal extends the scope of the ETS to several types of smaller ships by lowering the threshold from 5,000 gross tonnage (GT) to 400 GT.
Danish Shipping, the trade and employers’ organisation for Denmark’s shipping industry, welcomed the Commission’s proposal for a targeted reduction of the tonnage threshold to 400 GT for selected vessel categories. “This will contribute to a more level playing field and increase demand for alternative fuels and propulsion solutions by bringing more vessels within the scope of the system,” it said in a statement.
The Commission’s revised proposal is to be negotiated between the European Parliament and the Council in autumn 2026, with a possible agreement in the first half of 2027 and expected implementation in 2028.
Industry association European Community Shipowners’ Associations (ECSA) said the proposal makes progress regarding the IMO process, committing to avoid double payments should an international agreement be reached. However, it stops short of sending a strong signal to international partners that the EU ETS will be withdrawn once an IMO agreement is adopted.
“Today, the Commission has taken a first step to earmark ETS revenues at EU and national level. Support for sustainable fuels is welcome and necessary to make them available at European and global level. In this regard, support for the availability of fuels in third countries is encouraging.
“However, the proposal fails to deliver on the uptake of clean technologies, limiting support to wind and electricity alone. Technologies that can quickly improve energy efficiency and deliver immediate emission savings are left without support.
“On the IMO process, progress has been made with the commitment to avoid double payments. However, a clear signal to the international community that the ETS will be withdrawn once a global agreement is reached is still missing,” ECSA said in a statement.
Shipping companies have invested billions in vessels capable of operating on green fuels, but today there is no green fuel available to fill their tanks.
In accordance with the Danish Shipping, it is positive that funds from the ETS will now, to a greater extent, be used to support the green transition in areas where there have previously been gaps in the value chain.
“The EU must make greater use of the ETS to accelerate the transition. This includes stronger financial support for sustainable fuels and new technologies, as well as for the full range of energy-efficiency projects capable of delivering immediate emissions reductions from the existing fleet.
“When the industry contributes billions, those funds should also help drive the maritime transition where the need is greatest – both through solutions that reduce emissions here and now and through the technologies and infrastructure needed to scale up the green fuels of the future,” said Nina Porst, executive director of sustainable ships and skills at Danish Shipping.
