European Council Adopts Fit for 55 Amendment to Include Shipping
The European Council has adopted five laws that are part of the Fit for 55 package, including the amendment to include shipping in the EU emissions trading system (ETS).
The package sets the EU’s policies in line with its commitment to reduce its net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels and to achieve climate neutrality in 2050.
The vote in the Council is the last step of the decision-making procedure. The laws will now be signed by the Council and the European Parliament and published in the EU’s Official Journal before entering into force.
After that time, emissions from shipping will be included within the scope of the EU ETS for the first time. Obligations for shipping companies to surrender allowances will be introduced gradually: 40% for verified emissions from 2024, 70% from 2025 and 100% from 2026.
Most large vessels will be included within the scope of the EU ETS from the start, while others, namely offshore vessels, will be included in the MRV regulation on the monitoring, reporting and verification of CO2 emissions from maritime transport first, and only later included in the EU ETS.
Non-CO2 emissions (methane and N2O) will be included in the MRV regulation from 2024 and in the EU ETS from 2026.
The EU ETS is a carbon market based on a system of cap-and-trade of emission allowances for energy-intensive industries and the power generation sector. It is the EU's main tool in addressing emissions reductions. Since its introduction in 2005, the EU's emissions have decreased by 41%.
The Fit for 55 package aimed to reform the EU ETS by making it more ambitious. It was presented by the European Commission on July, 14 2021 under the European Green Deal. The Parliament formally adopted the laws on 18 April 2023.