EU/climate: agreement on maritime transport, carbon market reform stalls

MEPs and EU Member States have reached an agreement to make shipping pay for its polluting emissions.

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MEPs and EU member states have reached an agreement to make shipping pay for its polluting emissions, but the rest of the negotiations on a comprehensive reform of the European carbon market continue to stall, risking derailing the European climate plan.

Ships over 5,000 tons will have to acquire “rights to pollute” on the European Emissions Trading Scheme (ETS), so as to cover in 2025 at least 40% of the emissions of the maritime sector (based on the emissions recorded in the previous year), according to the compromise reached, reported by two European Parliament negotiators.

This level will rise to 70% in 2026 and then to 100% of their emissions in 2027.

Smaller vessels, such as luxury yachts, will be exempted, but cargo and cruise ships will be mostly affected.

Responsible for 3% of global emissions, maritime transport, by the end of the decade, “will contribute twice as much as the automotive sector to our goal of reducing CO2″, recalled Wednesday Peter Liese, EPP MEP (right), recalling that many ships
still run on heavy fuel oil.

Only trips within the EU will be fully included: trips to and from third countries will only be counted at 50%.

But polluting emissions other than CO2 (nitrogen oxide, methane, etc.) will also be subject to the obligation to purchase allowances from 2027.

Finally, “the revenue from the sale of 20 million carbon credits will be paid into the European Innovation Fund” and can thus be “used to renew the fleet” with cleaner technologies, observes Michael Bloss, the Green negotiator.

On the other hand, on other aspects of the ambitious reform of the carbon market, States and MEPs “are moving at a snail’s pace” and “failure is not excluded,” he said.

The Commission had proposed extending it to the building industry and road transport, thus obliging fuel and heating oil suppliers to buy allowances covering their CO2 emissions on a new carbon market, as is already the case for electricity suppliers and certain industries.

While the States approve this principle, MEPs want to limit this mechanism to office buildings and heavy goods vehicles, worrying about the additional cost for consumers in the midst of an inflationary surge.

Of course, a “social fund” financed by the revenues of this new market would support vulnerable households and companies, but MEPs and Member States are divided on its level and modalities.

They also remain divided on the gradual phasing out of the free allowances previously allocated
to European manufacturers, in return for the establishment of a “carbon tax” at the EU’s borders.

Two days of negotiations are scheduled for December 16 and 17 to resolve all these interconnected issues.

“We’re working like crazy to find a compromise, but I’m not sure we’ll get there,” confides Liese.

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