EU ETS debate calls for industry-wide collaboration to ensure sustainability does not kill competitiveness

The Cyprus Shipping Deputy Ministry (SDM) facilitated a virtual debate on this week, which explored the European Commission’s (EC) proposed Emissions Trading System (ETS) for shipping. Bringing together regulators, shipowners, and NGOs, the aim of the discussion was to support the public consultation and provide a collective contribution to the policy and law-making process.

The ambitions of the European Green Deal require a net reduction of at least 55% of greenhouse gas emissions by 2030 and climate-neutrality by 2050. The inclusion of maritime transport in its ETS is one of the proposed initiatives to achieve this.

The virtual debate was addressed by Prof. Costas Kadis, Cypriot Minister of Agriculture, Rural Development and Environment, and Mr. Andreas Kettis, Head of the Office of the European Parliament in Cyprus.

Vassilios Demetriades, Cyprus Shipping Deputy Minister moderated the session and was joined by  Clara de la Torre, Deputy Director-General of Directorate General for Climate Action (DG CLIMA), European Commission and  Magdalena Adamowicz, MEP, Member of the Committee on Transport and Tourism, European Parliament. Shipowners were represented by Andreas Hadjiyiannis, CYPRUS SEA LINES CO. LTD, Capt. Alfred Hartmann, Hartmann AG, and Philippos Philis, Lemissoler Navigation Co. Ltd. The NGO community was represented by Dr Faig Abbasov, Shipping Director at Transport & Environment (T&E), and Dr Xenia I. Loizidou, AKTI Project and Research Centre.

While it remains uncertain as to what level an EU ETS will be effective in reducing GHGs from shipping, speakers agreed that the sector must make a meaningful contribution to climate change. And also on the value of collaboration and cooperation between regulators, the shipping industry and NGOs to ensure a more sustainable future for shipping.

As climate change knows no borders, and considering the international nature of shipping, it was deemed that, ideally, the International Maritime Organization (IMO) remains the most appropriate body to regulate the reduction of GHGs emissions from ships.

Should the European Union push ahead with regional measures, panellists agreed that clarity will be vital, asking that the ETS must clearly specify the geographic scope of application and clearly define each entity’s obligation. There was consensus that any scheme introduced by the EU aiming at the reduction of GHG emissions from shipping must be compatible and scalable to what the IMO might introduce in the future.

A key concern was the viability for small and medium-sized enterprises, which form the backbone of EU shipping and the risk that an ETS could encourage cargoes to be redirected to more polluting modes of transport. The trading of GHGs within the sector was also requested, as well as the ability to fund research and innovation in alternative fuels and carbon-neutral technologies.

Vassilios Demetriades, Cyprus Shipping Deputy Minister and seminar moderator, commented: “While there remain strong views on both sides of the argument, what remains crystal clear, is the ongoing need for collaboration and cooperation between regulators, the shipping industry, and NGOs. I believe that we all want a better, safer, smarter, more sustainable future for shipping; we all recognise the need to play our part in making a positive difference.”

He concluded: “The shipping industry is in a period of profound transformation and only by working together will we be able to find the right balance between environmental progress and safeguarding competitiveness. In pursuing the right course of action to achieve this, a collective focus on sustainability – in every sense of the word – is critical.”

All outputs from the discussion, including questions and comments submitted from those attending virtually, will be shared with the European Commission. To watch the seminar recording, please visit the Cyprus SDM website here.