The European Union has agreed to add shipping to its carbon market for the first time, forcing vessels to pay for their planet-heating emissions and increasing pressure on the maritime sector to invest in greener technologies.
The shipping sector has so far escaped the EU carbon market, which requires factories and power plants to buy permits when they emit carbon dioxide, providing a financial incentive to emit less.
That is set to change from 2024, when shipping companies will have to buy EU carbon permits to cover 40 per cent of their emissions, rising to 70 per cent in 2025 and 100 per cent in 2026.
“This will not only help the climate but also improve air pollution in cities close to rivers and the coast,” Peter Liese, lead EU lawmaker on the rules, said on Wednesday.
The deal, agreed late on Tuesday by lawmakers and negotiators from the 27-country bloc, would add to the carbon market all carbon dioxide, methane and nitrogen dioxide emissions from maritime voyages within the EU.
It would also include 50 per cent of emissions from international voyages starting and ending in the EU, clamping down on pollution between country borders that often gets left out of governments’ national emissions-cutting policies.
Lawmaker Liese said the rules would encourage ship owners and operators to invest in the best available technologies such as less polluting fuels. Negotiators also agreed to dedicate revenues from the sale of 20 million EU carbon permits to fund maritime emissions-cutting projects.
Shipping is seen as one of the trickiest sectors to decarbonize, with industry groups citing a lack of commercially viable technologies.
With about 90 per cent of world trade transported by sea, shipping accounts for nearly 3 per cent of the world’s CO2 emissions, although that share is set to rise over the coming decades if left unchecked.
The shipping deal is part of a bigger revamp of the EU carbon market – one of a raft of policies the EU is upgrading to deliver its target of reducing net greenhouse gas emissions 55 per cent by 2030, from 1990 levels.
EU negotiators will attempt to agree the rest of the carbon market upgrade by Dec. 17, and then formally rubber-stamp the law.