As the IMO and the EU work towards a net zero emissions future, shipping is in a transition and is going through a phase of fundamental change.
The sector has dealt successfully with one crisis after the other and has become more extroverted, more open, and more influential. Many policy initiatives are in the pipeline, which will change the sector for good. It is a make-or-break moment for the competitiveness of the sector. At the European level, the European Community Shipowners’ Associations (ECSA) has worked to ensure that the voice of shipowners is heard making our sector more impactful.
It is essential to understand the dynamics and the new political landscape. Shipping is very high on the political agenda, and we need to highlight the great contribution of shipping to global trade and to the competitiveness of the European economy. Shipping enables Europe to trade with the rest of the world, grow, and create wealth for its people. We should not forget that sustainability means environmental, economic, and social sustainability. Importantly, European shipping is a cornerstone for European security, energy security, food security, and supply chain security for consumer goods. Shipping connects Europe with the rest of the world, and we need to better raise awareness of its contributions with EU policymakers.
ECSA has the privilege to represent national associations from 20 EU/EEA countries. It covers all segments of shipping from bulk carriers to ferries, container ships, tankers, cruise ships, and offshore vessels, operating both in short-sea shipping and in deep-sea transport. We are able to tap into this diversified expertise of our members and come up with workable solutions. At ECSA, European shipowners are united in diversity. ECSA is the focal point of the sector in Brussels and because of this, it successfully brings to the table key stakeholders along the maritime supply and logistics chain from ports, terminals, shippers, shipyards, and manufacturers, as well as NGOs. These efforts to build broad coalitions and communicate transparently with stakeholders are at the center of our recent successes in the policy files.
Although European shipowners would have preferred an international solution, ECSA recognises that shipping should contribute its fair share to address the climate crisis at the EU level as well. We welcomed the increased climate ambition of the EU ‘Fit for 55’ package, but we have voiced a number of concerns emerging from the proposals for the inclusion of shipping in the EU Emission Trade System (ETS) and the proposal on FuelEU maritime. Throughout the legislative process, we have engaged proactively with the European Parliament, the Council, and the Commission to address inconsistencies and ensure the final legislative outcomes would be workable for the industry while delivering on the EU’s climate objectives.
ECSA’s proposals on the EU ETS were seen as environmentally consistent with the overall climate targets of the EU and were adopted to a great extent by the European legislators. For example, in line with ECSA’s position, the EU ETS will mandate the pass-through of the costs to the commercial operators to encourage the operators to improve the operational efficiency of the vessel, use cleaner fuels, and reduce emissions.
In order to bridge the funding gap of shipping’s decarbonisation, we need financing solutions. ECSA succeeded in ensuring that part of the EU ETS revenues generated by shipping would be earmarked for the decarbonisation of the shipping sector. Projects to improve the energy efficiency of ships and ports, innovative technologies and infrastructure, as well as the deployment of sustainable alternative fuels and zero-emission propulsion technologies will be eligible. The projects will have to demonstrate European added value to be eligible. This will ensure that zero-emission solutions are developed and deployed. As the Commission starts working on the implementation framework for the EU ETS, ECSA’s priority for the coming months is to continue its active engagement to ensure that the criteria to access the funds are practical and adapted to the needs of the shipping industry. This is essential in particular when it comes to securing access to finance for the high number of SMEs that constitute the backbone of our industry.
For shipping to transition towards zero emissions, we need all hands on deck to ensure sufficient quantities of low- and zero-carbon fuels are made available in the market at an affordable price. This is why ECSA has engaged actively in the discussions on the FuelEU Maritime proposal, which introduces energy intensity reduction targets on the shipping industry with a view of stimulating the demand for clean fuels and therefore creating better supply. In this context, ECSA advocated from the start for the principle of shared responsibility with fuel suppliers, so that fuel suppliers produce and make available sufficient quantities of alternative fuels in the market. As the negotiations on this proposal are ongoing, ECSA recently published a statement on FuelEU Maritime, calling the European Parliament and the Council to support the mandatory inclusion of fuel suppliers under the scope of the regulation, to ensure that shipowners are not unduly penalised if the sustainable fuels necessary for compliance are not delivered. Conditional to the mandatory inclusion of fuel suppliers and the availability of fuels, ECSA expressed support in principle for the proposal of the Parliament on a sub-quota for renewable fuels of non-biological origin. In addition, ECSA also voiced support for the introduction of a multiplier for the use of sustainable and scalable fuels for shipping under the FuelEU Maritime Regulation.
If the correct framework is created to engage the entire maritime ecosystem from fuel suppliers, shipowners, and operators to infrastructures, we are confident that the European shipping sector can be on the path to zero emissions future.