The European Commission (EC) plans to introduce emissions trading for all ’relevant sectors’, including shipping
At the COP 25 conference in Madrid, the EC’s new president Ursula von der Leyen spoke of the Commission’s intent to introduce a European Green Deal. Sector-specific emissions trading would be part of any such plan, she said.
President von der Leyen became the first female president of the EC on 1 November 2019 after being elected to the post in June. She ran her campaign on an agenda that spelled out her intent to extend the EU’s Emissions Trading System in the opening pages of her Political Guidelines for the next European Commission 2019-2024.
"I will propose to extend the Emissions Trading System to cover the maritime sector and reduce the free allowances allocated to airlines over time. I will also propose to extend this further to cover traffic and construction," she wrote as a candidate in the first point on her agenda. "The different systems will have to converge by 2030 if we are to be climate neutral by 2050."
Emissions trading schemes in shipping would be a new feature in international plans to address climate change. Other international plans, including the 2015 Paris climate agreement, have not specifically addressed shipping industry emissions.
The shipping industry has taken its own steps on the emissions issue through its United Nations regulatory body, agreeing an initial framework for curbing emissions in April 2018 through the International Maritime Organisation (IMO).
In November 2019, however, an IMO working group postponed until 2020 a decision on short-term measures to combat the industry’s climate impact. Shipping emits almost a gigatonne of greenhouse gasses each year.
The EC has said in published documents that it sees its proposed carbon tax as a viable and effective long-term solution for emissions reduction across sectors by 2050, claiming that by 2020, emissions from sectors covered by the Emissions Trading System will be 21% lower than when the system was launched in 2005. Despite the progress, energy companies have called on the EU to set a more ambitious target to become carbon neutral by 2030.
In November, the EU’s lending arm, the European Investment Bank (EIB), announced its intent to cease funding fossil fuel projects at the end of 2021. EC president Ms von der Leyen has said she wants the EIB to dedicate half of its total financing to climate investment by 2025.
The European Green Deal will propose the EU’s first climate law with the target for Europe to be carbon neutral by 2050. The EC aims to embed this in domestic legislation by March 2020. More information on the Green Deal will be unveiled on 11 December.