Including maritime transport in the EU Emission Trading System – addressing design and impacts

The aim of this project is to assess the overall design and consequences of including maritime transports in the EU emission trading system. The included aspects are geographical scope, allocation of allowances, time frame of implementation, as well as impacts on greenhouse gas emissions, economic impacts for the maritime sector as well as on early movers and modal split.

Summary

The aim of the project is to assess the overall design and consequences of including maritime transports in the EU ETS. An inclusion of shipping in the EU ETS would likely be built upon the data and scope of the current monitoring, reporting and verification system, which is covering the legs of a ship’s route before and after a port call to one of EEA’s states. The CO2 emissions captured by MRV was 141 Mtonnes in 2018, estimated to grow to approximately 178 Mtonnes by 2026 if no abatement measures are taken. Alternatively, only including emissions from intra-EEA shipping would limit the emission scope, estimated to reach approximately 75 Mtonnes in 2026.

The costs for the shipping sector will be determined mainly by 1) the price of allowances and 2) if allowances are given for free or if they are auctioned. Based on our assumptions of 5 to 100 % of allowance auctioned, and a price of 25-70 EUR/tonne CO2 gives an estimated additional cost to the included shipping of 0.2 – 12.5 billion EUR. To set these cost increases into a context, it generates a price increase of between 0.6% and 33% per tonne marine gas oil.

Coworkers: Anna Mellin, Erik Fridell, Julia Hansson, Lars Zetterberg

Year: 2020

Report number: C521

Authors: Anna Mellin, Julia Hansson, Lars Zetterberg, Erik Fridell, Milan Elkerbout, Anastasia Christodoulou, Johan Woxenius

Download publication