Shipowners blast upcoming EU ETS as ‘a tax on maritime trade’

Does anyone still think that the EU ETS will have a positive effect on shipping emissions? It should be thoroughly debunked by now that increasing the effective cost of fuel by $300/tonne – less than half of the range it has varied in since 2021 – would have any incremental positive effect on vessel speeds or operational efficiency. That is simply not how the world works.

Without a clear path for the funds raised to go to maritime zero-carbon fuel research, infrastructure or price subsidies, this falls into the “tax grab” category.

Indeed, the introduction of the scheme will almost certainly increase overall emissions. Firstly, because you are making (relatively “green”) European industry less competitive by increasing the cost of its inputs and outputs, thereby moving marginal production to areas of the world with less strict regulations on emissions or to areas just outside EU borders which are not subject to this transportation tax, thus, increasing sailing distances. Secondly, because the loopholes that might be used – e.g. transshipments or ship-to-ship transfers – means you will use smaller tonnage for the final leg into the EU, which by definition will increase emissions per tonnemile.

The best thing that can be said about the EU ETS is that it may force the IMO to implement a global carbon tax more quickly. Such a tax won’t reduce emissions by itself, but the difference will hopefully be that the IMO will direct the funds raised towards subsidizing the initial uptake of zero-carbon marine fuels.

It is what it is, though, and the good news is that the introduction of SSY’s new carbon solution has just made your path to compliance much easier. Just check with my colleague James Ash.

Read the article here.

Dr. Roar Adland
Global Head of Research