A study by European Shipowners, ECSA, finds the European Commission’s proposed Sustainable Maritime Alternative Propulsion mechanism covers only a third of what shipping needs. The Commission proposes 110 million allowances; ECSA’s modelling says at least 330 million allowances, about 30 billion euros, would be required over 2028 to 2040 to create a credible market for sustainable maritime fuels and technologies, leaving a shortfall of 220 million allowances. Even at 330 million, the reserve would represent less than a third of shipping’s estimated cumulative ETS surrender requirements over the same period.
The association’s case rests on the sector’s contribution. Shipping is responsible for about 10 percent of emissions covered by the EU ETS but pays almost 20 percent of total ETS revenues, purchasing roughly 90 million allowances a year, which at an illustrative carbon price of 100 euros an allowance represents an annual outlay of about 9 billion euros. Unlike other sectors, shipping has never received a single free allowance. ECSA calls on the European Parliament and the Council to at least triple the earmarked revenues, and says support must cover all sustainable fuels and technologies, including energy efficiency projects, to help shipping meet FuelEU Maritime’s 2040 target.
“Shipping pays almost 20 percent of the total ETS revenues, although it is responsible for 10 percent of the emissions covered by the ETS,” said ECSA Secretary General Sotiris Raptis. “The Commission proposal covers only a third of what is needed to help create a market for clean fuels and tech.” The Commission’s own impact assessment suggests the mechanism could contribute annual greenhouse gas reductions of between 1.7 and 9 million tonnes of carbon dioxide by 2035, depending on funding. The proposal remains part of the ongoing ETS revision and is subject to approval by Parliament and Council.