Negligible Risk of Ships Evading EU Carbon Market — Study

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December 14th, 2020 by  

Originally published on Transport & Environment.
By Sam Hargreaves

EU regulators have little to fear from shipping companies evading the bloc’s carbon market if it is applied to long-distance voyages, a new study shows. The shipping industry has warned that operators would make evasive port calls in neighboring non-EU countries to avoid buying pollution permits for the whole voyage. But, at most, 7% of ships calling at EU ports would benefit from avoidance at today’s carbon price, according to an analysis by Transport & Environment (T&E).

The findings come as EU regulators prepare a proposal to include shipping in the emissions trading system (ETS) and weigh up the benefits of covering all emissions (known as “full scope”) or simply trade within the EU.¹ A ship from Houston, for example, could stop at Morocco before it reaches Spain and then only buy pollution permits for the short, final leg of the voyage. Yet as T&E’s study of tens of thousands of port combinations shows, the savings from evading a full-scope ETS would be just 7%, due to extra costs including fuel and port charges. With an ETS covering half the long-distance voyage (“semi-full scope”), the benefits of evasion are non-existent, the study finds.

Sofie Defour, shipping officer at T&E, said:

“The study demonstrates that horror stories of massive carbon leakage if ships were included in a carbon market are false. The EU has little to fear from shipowners evading its ports to make non-existent savings. It’s high time it made the sector start paying for its pollution.”

Ship-owners would face minimal costs in a “full-scope” ETS covering all emissions on voyages to and from the EU. Pollution permits for transporting a standard container from Spain to Singapore would be less than 2% of the overall transport cost, dropping to less than 1% if the “semi-full scope” would be included. T&E said the EU should defy industry scaremongers and cover long-distance shipping emissions in its carbon market and not just pollution on voyages within Europe.



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