Why MEPs must act on aviation and shipping emissions

In a plenary vote on 14 February, the European Parliament will adopt its position on reforms to Europe’s emissions trading system (EU ETS) for the 4th trading period (2021-2030). These reforms aim to fix major issues with EU ETS such as the need for tighter reduction caps and the oversupply of allowances which has depressed the carbon price. 

Following a vote in the Environment Committee last December, the proposal before the Parliament’s plenary contains important provisions for aviation and shipping emissions. Aviation and shipping are currently responsible for 27% of all European transport emissions and 7% of total European emissions, and are projected to grow considerably in the coming years.

However, despite this considerable and growing climate impact, both sectors’ emissions remain largely unregulated. As well as having tax-free fuel, shipping CO2 is completely unregulated and not included in any climate targets, while only flights within Europe (one-quarter of emissions) are included in the EU ETS.

The proposal to be voted on by the Parliament will include shipping in a Maritime Climate Fund, established under EU ETS, from 2023 if the UN’s International Maritime Organisation (IMO) fails to act by then. The proposal also retains aviation in EU ETS, while strengthening and aligning its provisions with other ETS sectors. For example, by providing for a declining aviation cap and fewer free allowances.  

Both these moves are critical to ensuring that aviation and shipping contribute in a fair way to Europe achieving its 2030 climate goals. 20 years after Kyoto, the responsible UN bodies, ICAO and IMO, have shown an inability to rise to the task. Failure to act now will see rising aviation and shipping emissions undo hard work to reduce emissions from other sectors such as land transport. This briefing provides background to the vote, and recommends that MEPs agree to include shipping and retain aviation in a reformed EU ETS.