How to optimise the ETS for container cargos

2023 was a pivotal year for the shipping industry. EU policy-makers agreed on a plan to make shipping companies pay for their pollution for the first time. From 1 January 2024, maritime transport has been included in the EU’s Emissions Trading System (ETS), finally charting a course towards zero-emission shipping.

Some stakeholders have argued that the shipping ETS will lead to a loss of business for European seaports. While studies from the European Commission and others have not substantiated these claims of ‘leakage’, it may be pertinent to consider potential technical fixes to assuage perceived risks.

This briefing makes the case that a limited adjustment in the methodology of the ETS by calculating ETS costs on the basis of the origin of the container cargo - rather than the last leg of the voyages - for vessels that come from selected non-EU transhipment ports would both improve the climate-ambition of the policy and deal with ports’ concerns. The proposed adjustment in the methodology need not to impact the rest of the maritime ETS or other cargo types; only the traffic in a limited-number of non-EU transhipment ports.