The German Shipowners’ Association (VDR) has urged the German government to enact legislation to integrate the shipping sector into the European Union’s emissionstrading system (EU ETS), as reported by Reuters on March 12. The VDR revealed that the government is working to transform a 2022 EU agreement, which required shipowners to pay for their emissions by purchasing EU carbon credits, into national legislation. VDR’s managing director, Martin Kroeger, said operations of the shipping sector rely on both planning certainty and maintaining uniform competitive conditions globally. He also stressed the need to implement an emissions pricing mechanism aligned with international standards, or the shipowners might have to pay twice for the same emissions.

In November 2022, the EU agreed to add shipping to its carbon market, expanding its scope beyond the energy sector and manufacturing industry. The inclusion aims to force shipping companies to explore decarbonization methods, such as less polluting fuels or carbon capturetechnologies. Under the EU rules approved in 2023, shipping companies are required to monitor, report, and pay for emissions from all large vessels with 5,000 gross tonnage or above. Starting in 2024, they need to offset40% of their emissions with EU ETS emission allowances, rising to 70% in 2025, and 100% in 2026. As part of the ETS arrangement, the EU lawmakers haveagreed to allocate the proceeds from the sale of 20 million EU carbon permits towards initiatives aimed at reducing emissions in the maritime sector.

Sources:

https://www.reuters.com/sustainability/german-shipowners-want-clarity-berlin-carbon-trading-2024-03-12/

https://www.reuters.com/business/cop/eu-strikes-deal-make-ships-pay-their-carbon-emissions-2022-11-30/

https://climate.ec.europa.eu/eu-action/transport/reducing-emissions-shipping-sector_en