European Parliament formally approves shipping inclusion in EU ETS

Members of the European Parliament (MEPs) yesterday voted in favour of including shipping in the EU Emissions Trading System (ETS).

PHOTO: European Parliament headquarters in Strasbourg, France. Getty Images

The final vote from European Parliament puts maritime shipping emissions under EU ETS.

An ETS for shipping is part of the EU's broader Fit for 55 package, under which responsible shipping companies will be liable for their fleets' CO2 emissions from 2024. The system will mean they can convert their reduced carbon footprint into tradeable carbon credits.

The current package allocates 20 million ETS allowances for maritime decarbonisation projects. Ship managers will have to surrender their allowances in 2025 to cover 40% of their emissions registered in 2024, in 2026 for 70% of their emissions registered in 2025 and finally in 2027 for 100% of their emissions registered in 2026.

The European Parliament also agreed to include methane and nitrous oxide in its emissions package, in addition to CO2.

The EU ETS text now requires formal endorsement from European Council before the regulation can be published in the EU Official Journal.

By Nithin Chandran

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