Since introducing the EU ETS in 2005, the EU say the scheme has helped reduce greenhouse gas emissions from power and industry plants by 27%.
With large ships (gross tonnage of 5,000 and higher) now in the scheme since 1 January 2024, the EU hopes to see similar success in the shipping industry.
To encourage and finance this transition towards cleaner fuel and energy systems, the EU’s ETS operates as a cap-and-trade system for greenhouse gas emissions.
The cap aspect represents a limit on the total amount of greenhouse gas, expressed in ‘emission allowances’ that operators covered by the EU ETS can emit without heavy fines.
The trade aspect is a market where operators can buy, sell, and trade allowances. Operators who emit less than their cap can either keep their allowances to use in the future or sell them to those who have or will go over their cap.
A world first for shipping
Although other governments also operate their own ETS’s, the EU is the first to bring shipping into the fold. “There is no similar set-up being built anywhere but Europe, but other regions are thinking about implementing similar solutions,” says Albrecht Grell, Managing Director of OceanScore, which specialises in emission tracking and ETS compliance solutions for the maritime industry.
Read the full article EU brings shipping into the Emissions Trading System at The Marine Professional.