Stability in Shipping Market Under Emissions Trading System

The European Commission has released a report on the implementation of the EU Emissions Trading System (ETS) for shipping, indicating that there is no evidence of major market changes suggesting circumvention. The EU ETS was expanded to include maritime transport from January 1, 2024, affecting approximately 12,000 large ships. Analysis of shipping traffic data did not reveal any significant trends in relocation of container transhipment activities or increased stops at non-EU ports by shipping companies. There was also no evidence of a modal shift towards road transport or smaller ships, which could indicate evasive behavior.

In addition to the report on the EU ETS, the Commission also assessed the potential inclusion of small ships between 400 and 5,000 gross tonnage under the EU regulation for Monitoring, Reporting, and Verification (MRV) of maritime greenhouse gas (GHG) emissions. Currently, over 5,300 smaller vessels emitting around 11 million tonnes of CO2 annually are not covered by the legislation. Including these ships could increase emissions covered by the legislation by approximately 9% and expand the number of regulated ships by about 42%. However, the report notes that the balance between administrative costs and additional monitored GHG emissions is less favorable for smaller ships.

The analysis highlights that the net present value of additional administrative costs for smaller vessels exceeds the potential GHG emission savings attributed to the MRV maritime Regulation alone. Nonetheless, these findings could change if GHG emission savings from integrating smaller vessels into other GHG mitigation policies, such as the EU ETS and FuelEU, were considered. The potential additional benefits will be assessed in the context of the 2026 review of the EU ETS Directive. The report does not foresee reduced shipping services to EU islands or outermost regions, indicating a stable market behavior despite isolated cases of potential circumvention.

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