SIMIC

Under the deal struck last week, all ships of 5,000 gt and over within the EU will be required to pay for 100 per cent of their emissions, while 50 per cent of the emissions on voyages between EU and non-EU ports will be covered.

The percentage of emissions covered will increase over time, starting at 40 per cent in 2024, moving to 70 per cent in 2025, and reaching 100 per cent by 2026. These figures still need to be confirmed by member states during the next negotiating round.

Compared to the initial European Commission proposal, an agreement was reached not only to include CO2 in the ETS but also methane and NOx, as well as offshore vessels over 5,000 GT, according to Singapore's Splash 247.

Negotiators also secured earmarking for 20m ETS allowances, which correspond to EUR1.5 billion (US$1.6 billion) under the current ETS carbon price, to be reinvested into the sector via an innovation fund.

"Dedicated support through the Innovation Fund is key to bridging the price gap with clean fuels, improving the energy efficiency of ships, fostering innovation and building the infrastructure in ports," said Sotiris Raptis, secretary general of the European Community Shipowners' Associations (ECSA).

"With this ambitious ETS covering all greenhouse gases, offshore vessels and ensuring funding for green shipping, the EU has thrown the gauntlet down to other jurisdictions like the US, China, and Japan to make this hugely important first step towards zero-emission shipping," added Jacob Armstrong, sustainable shipping officer at Europe's clean transport campaigner, Transport & Environment (T&E).

The ETS is part of the "Fit for 55 in 2030 package", which is the EU's plan to reduce greenhouse gas emissions by at least 55 per cent by 2030 compared to 1990 levels.

The next meeting on the ETS is scheduled for December 16 and 17 where negotiators will try to reach an overall agreement on the ETS revision