Nations claim that the EU’s shipping carbon price jeopardizes economic expansion

smoke pollution coming from a container ship
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Six European Union member states, including Italy, have raised concerns that the upcoming carbon pricing rules for shipping emissions could have a negative impact on economic growth. These countries fear that shipping companies may choose to dock at ports near, but outside of the EU, in order to avoid the carbon price. They have called on the European Commission to consider solutions such as financial compensation. Italy’s minister for ecological transition, Gilberto Fratin, highlighted the significant negative consequences for EU industry competitiveness and stressed the need for corrective measures. Last year, an agreement was reached to gradually include shipping in the EU’s carbon market, starting from January 1, 2024, initially covering 40% of emissions and eventually expanding to cover 100% by 2027. The EU climate commissioner, Wopke Hoekstra, stated that the impact on competitiveness would be monitored. The EU has already identified Egypt’s Port Said and Morocco’s Tanger Med as “neighboring container transshipment ports” to prevent circumvention of the carbon market rules. However, Italy’s Fratin argued for stricter rules to include more ports. Portugal, Malta, Greece, Cyprus, and Belgium also expressed similar concerns at a meeting of environment ministers in Luxembourg.

The member states emphasized the need to closely monitor the situation to prevent irreversible impacts on their economies. They urged the Commission and member states to work together to find solutions. The concerns raised by these countries highlight the potential unintended consequences of carbon pricing regulations. While the rules aim to reduce shipping emissions, they could inadvertently shift economic activities and investment outside of the EU, resulting in a negative impact on domestic industries. As a result, these member states are calling for stricter rules to prevent shipping companies from avoiding the carbon price by docking at ports outside the EU. It remains to be seen how the European Commission will respond to these concerns and whether they will make adjustments to the regulations to address the fears raised by these countries.

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