The European Commission on Wednesday proposed adding shipping to the bloc’s carbon market for the first time, adding pressure on an industry, which had for more than a decade avoided the European Union’s system of pollution charges, to become greener.

Shipping is seen as one of the trickiest sectors to decarbonise, with industry groups citing a lack of commercially viable technologies.

Under the EU plan, shipping would be added to the European Union Emissions Trading System (ETS) gradually from 2023 and phased in over a three-year period.

Ship owners will have to buy permits under the ETS when their ships pollute or else face bans from EU ports.

In addition to ships sailing within the EU, the proposals will also cover 50% of emissions from international voyages starting and ending in the bloc, the proposal showed.

The EU ETS, the world’s largest carbon market, was set up in 2005 and, by placing a price on pollution, has helped to force utilities to shift away from fossil fuel to increased use of renewable energy.

Efforts to bring in international aviation threatened a trade war, forcing an EU policy U-turn, although emissions from flights within Europe are covered by the EU carbon market.

Similarly, the EU shipping plan has potential to place the bloc on a collision course with the International Maritime Organization, which is coordinating measures to curb emissions among its more than 170 members.

Bob Sanguinetti, chief executive of the UK Chamber of Shipping, said the industry agreed more needed to be done to cut emissions, but that international rather than EU regulations were “the best way to create real, lasting change”.

“We have seen how regional measures can distort the market and we encourage our EU partners to work collaboratively with the industry taking these proposals to the IMO to accelerate the decarbonisation journey,” he said.

“The Chamber would prefer not to have different regulations in different jurisdictions.”

The European Commission’s proposals need to be negotiated and approved by a majority of EU countries and the European Parliament before they enter into force, a process that could take up to two years.

Source: Reuters