The significant increase in carbon dioxide (CO2) emissions over the past century is evidently one of the leading causes of global warming and climate change.
In response to the global environmental crisis, in December 1997, the United Nations Framework Convention on Climate Change (UNFCCC) implemented a treaty called the Kyoto Protocol. Two main goals of the Kyoto Protocol were to reduce greenhouse gas emissions and promote sustainability, while also aiming to provide support and provisions for developing countries.
What is the the European Union Emissions Trading System (EU ETS)?
The Kyoto Protocol eventually led to the establishment of the first global emissions trading system in 2005: the European Union Emissions Trading System (EU ETS). The primary objective of the EU ETS is to reduce greenhouse gas emissions in the most economical and efficient manner.
The EU ETS targets entities that produce a significant amount of greenhouse gas emissions, such as heavy industries (cement, steel, and chemical), aviation, oil refineries, and more recently: shipping.
The maritime industry is responsible for a significant amount of carbon emissions. As a result, in May 2023, the decision to include shipping in the EU ETS was finalized. Now, another change is coming next year.
What’s changing for the shipping industry with the EU ETS change?
Starting in 2024, shipping activities within the European Economic Area (EEA) will undergo changes, which will include the implementation of carbon pricing. Imposing a price on carbon will help in the reduction of greenhouse gases. The shipping industry could make a huge impact in efforts to reduce greenhouse gases.
According to the European Union (EU) website, the EU ETS will cover CO2 emissions from all large ships entering EU ports. The system will cover emissions that are with and within EU ports. For voyages outside the EU, the system will cover 50% of emissions, while the third country will decide on actions for the remaining 50%.
It is important to acknowledge the essential role the shipping industry plays in the economy.
However, without taking into consideration the impact shipping and logistics has had, and continues to have, on global warming and climate change, our planet could be at serious risk. With this in mind, the EU ETS including shipping is not only a significant milestone for the maritime industry, but is a milestone for the entire world.