EU parliament rejected proposal to upgrade the ETS – not ambitious enough

June 9, 2022

The European Parliament unexpectedly rejected a proposal to upgrade the European Union's Emissions Trading System (ETS) on Wednesday. MEPs argued that it failed on climate ambition. Shipping inclusion does not seem to be questioned.

Image: Frederic Köberl (Unsplash)

The unexpected rejection seems to be caused by disagreements over climate ambitions. A main disagreement concerned the share of quotas and the emissions reduction targets in the system. According to current reports the inclusion of shipping into the ETS does not seem to have raised major debates, even if the European Parliament’s environmental committee (ENVI) some weeks ago voted to speed up the inclusion.  

According to Reuters negotiators will attempt to reach a new deal by 23 June. EU is racing to finish the law this year, so that it can apply in 2023.  

The EU Emissions Trading System (ETS) and freight rates

Are you wondering how the inclusion of shipping in the ETS will impact freight rates in general or do you want to understand the carbon exposure of your current shipping program, future voyages or FFAs?

Contact our sales team, investigate our ship emissions indexes or read more:  

See how new suggested changes to the ETS could make shipping carbon cost increase fivefold.

There are currently several suggested versions of how the maritime sector should be included in the EU ETS. In February we compared two versions to demonstrate how each of them would the impact freight rates.

European carbon price above USD 100 could increase freight rates by 10-30 %. In the beginning of February EU ETS allowances were traded above USD 100. We used four example voyages from the tanker segment to show how the carbon price could impact freight rates on intra EU voyages and on global EU voyages.

Factbox ENVI suggestion