EU-ETS review: last call from Europe’s ports to restore the level playing field and stop business leakage

The European Commission is currently finalising  a proposal to review the EU-ETS Directive 2003/87/EC which has been extended to the maritime sector in January 2024.  Since 2021, when the EU-ETS maritime proposal was launched, Europe’s ports have been asking to consider and address the negative impact both in terms of carbon and business leakage of the current limited regional scope of the EU-ETS maritime applying a 100% ETS tax on voyages between EU ports and a 50% ETS tax on incoming and outgoing calls from European ports.

The European Sea Ports organisation urges the European Commission through this upcoming review of the EU-ETS maritime to mitigate the negative and unwanted consequences of the current maritime ETS system and thus restore the competitiveness and level playing field of Europe’s ports and Europe’s short sea shipping sector.

While the first and main impact is being felt in Europe’s big transhipment ports in the Med, there are also clear examples of changes in call orders in other parts of Europe, which leads to a loss of direct connectivity with for instance Asia. Next to the loss of port calls and connectivity, the affected ports are also seeing an impact on investments in terminal capacity. The capacity in the EU neighbouring countries is increasing steeply and rapidly to the detriment of EU ports.

“ The European Commission and Europe’s policy makers must finally draw the lessons of these first years of application. It is high time to act! Europe’s Ports are key in realising Europe’s energy transition and energy security goals and guaranteeing Europe’s military preparedness. We cannot longer accept a policy that creates carbon leakage and risks to destroy the economic strength and competitiveness of strategically situated ports which we desperately need to realise Europe’s overall ambitions in terms of geopolitical and geo-economic resilience, energy transition and security”, says ESPO Secretary General Isabelle Ryckbost”

Last but not least, the EU-ETS maritime is affecting negatively short shea shipping in certain countries, with clear examples of modal backshift to the road, which is excluded from ETS until 2028.

“During decades, Europe has been pursuing a clear policy to move traffic away from road to maritime through its well-known concept of “Motorways of the Sea”.  The current EU-ETS is doing everything to put short sea shipping cargo back on the motorway,.” adds I.Ryckbost.

ESPO has submitted its proposals for the review of the ETS to the Commission. Reaching a global agreement directly followed by an alignment of the EU system is the first and foremost priority. Awaiting such an agreement, Europe’s ports call on lifting the 65% transhipment criterion for the list of neighbouring container transhipment ports excluded from the definition of port of call, opposing the broadening of the vessel scope, ask more attention on the specific impact on outermost regions and finally plead for a much large share of the ETS maritime revenues to go back to the corresponding investments in the maritime and port sector.

“ESPO and its members are and remain fully committed to Europe’s decarbonisation agenda. However, one cannot longer ignore the unwanted impact of the current EU-ETS both on decarbonisation and on competitiveness. The European Commission is currently making big efforts and developing new instruments to accelerate, reindustrialise, simplify and strengthen Europe’s competitiveness and resilience. But these efforts are a drop in the ocean for ports if the current EU-ETS maritime is not seriously reviewed”, concludes Isabelle Ryckbost.