CO2 payments should be used to scale EU green fuel production – Danish Shipping

Funds gathered as a part of the European Union’s CO2 Emissions Trading System (ETS) should be used to scale up green fuels production in Europe, Denmark-based shipowners’ association Danish Shipping said.

IMAGE: Flag of the EU. Getty Images

The EU has already set in place climate regulations for the maritime industry through the EU ETS and FuelEU Maritime. Next year, when the EU ETS is completely phased in, companies that are a part of Danish Shipping are expected to contribute DKK 3.8 billion ($598 million) to the system, it said.

The shipowners’ association has called for revenues from the ETS to be dedicated to funding shipping’s green transition, covering both fuel production and offtake.

“It is only logical that the funds we ourselves contribute through quotas should also be used to create the production of the fuels we will sail on in the future,” remarked Jacob K. Clasen, deputy chief executive officer of Danish Shipping.

The funds collected from the EU ETS must be used to accelerate green fuels production in Europe, before other regions outpace it, the shipowners’ association claimed.

Another key priority will be to secure proper coordination between the EU’s climate regulations and the forthcoming global framework that the IMO is preparing to roll out, according to Danish Shipping.

At this moment, all eyes in the shipping industry are on London, where the International Maritime Organization (IMO) is set to hold a decisive vote on its Net-Zero Framework on 17 October.

Danish Shipping said it is “giving its full backing to the agreement,” and urges its adoption. However, “a key prerequisite for success in climate transition is that a lot more alternative fuels are produced than is the case currently. And that must also happen in Europe,” Clasen said in an interview with shipping media outlet Søfart.

By Aparupa Mazumder

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