Decarbonisation And Shipping: EU Emissions Trading Scheme - Update

Published date12 August 2021
Subject MatterCorporate/Commercial Law, Environment, Transport, Compliance, Corporate and Company Law, Environmental Law, Marine/ Shipping
Law FirmHill Dickinson
AuthorMs Beth Bradley and Rachel Hoyland

On 14 July 2021, the European Commission published a package of proposals aimed at reducing the EU's net greenhouse gas emissions by 55% by 2030, compared with 1990 levels. Included in the 'Fit for 55' package was a revised proposal for including carbon dioxide emissions from maritime transport within the EU Emissions Trading Scheme, which replaces the previous proposal adopted by the European Parliament in September 2020.

The Fit for 55 proposal, in relation to maritime transport's inclusion in the existing EU Emissions Trading Scheme, includes a new directive which amends:

  1. Directive 2003/87/EC (the ETS Directive), which is the piece of EU legislation which governs the EU ETS; and
  2. Regulation 2015/75 (the MRV Regulation), which is the piece of EU legislation which governs the system of monitoring, reporting and verification of carbon dioxide emissions from ships, that was phased into operation from 2017 onwards.

What does the new proposed directive do?

It will apply to:

  1. Ships above 5000 gross tonnage, performing voyages with the purpose of transporting passengers or cargo for commercial purposes, but excluding warships, naval auxiliaries, fish-catching or fish-processing ships, wooden ships of a primitive build, ships not propelled by mechanical means, or government ships used for non-commercial purposes; and
  2. Carbon dioxide emissions released into the atmosphere by those ships.

And it will require the surrender of allowances to cover:

  1. 50% of the emissions from ships performing voyages that enter or depart the EU;
  2. 100% of the emissions from ships performing voyages between ports in the EU and from ships at berth in a port within the EU.

What is the implementation schedule?

It is presently proposed that it will be mandatory to surrender allowances in respect of carbon dioxide emissions produced in the year 2023, and beyond, on a phased basis as follows:

  1. 20% of verified emissions reported for 2023;
  2. 45% of verified emissions reported for 2024;
  3. 70% of verified emissions reported for 2025;
  4. 100% of verified emissions reported for 2026 and each year thereafter.

Who will be responsible for compliance?

The proposed directive requires compliance from a 'shipping company', which is defined as:

"the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner and that, on...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT