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Shipping's inclusion in the EU ETS approved

18 April 2023

Heavy parts of the EU's climate package "Fit for 55" have now been definitively approved by the EU Parliament, including the inclusion of shipping in the EU's emissions trading.

On Tuesday, the European Parliament approved the agreements with EU countries from the end of 2022 on several key pieces of legislation that are part of "Fit for 55" - the EU's plan to reduce greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels.

The reform of the emissions trading system EU ETS was adopted by a wide margin: 413 votes in favor, 167 votes against and 57 abstentions. For the shipping sector, this means that in the future you will have to buy emission rights on the same market as industry and energy producers. With the current price level for emission rights (around EUR 100 per ton of carbon dioxide equivalents), the industry organization Swedish Shipping estimates that fuel costs will rise by the equivalent of 30-40 percent. Hopefully, this will more easily motivate investment in innovation and new fuels.

But not everyone needs to pay. When shipping is incorporated into the EU ETS next year, only larger ships over 5,000 gross tons will need to pay for their emissions – first 40 percent in 2024, then 70 percent in 2025 before they have to account for 100 percent of their emissions in 2026. Smaller ships between 400-5,000 gross tonnes will be included in the "MRV Regulation" on monitoring, reporting and verification of CO2 emissions from 2025 and their possible incorporation into the EU ETS will be reviewed in 2026.

In addition to the reform of the EU ETS, Parliament also approved the carbon tariff CBAM and a social climate fund.

Some of the Swedish members of the EU Parliament commented on Tuesday's approval as follows:
"It will be very expensive for those who emit, while we reduce emissions. I am really proud and satisfied with where we have landed" (Emma Wiesner, C).
"Low climate ambitions should never be a competitive advantage. CBAM is a historic step to price all emissions that occur as a result of consumption in the EU" (Karin Karlsbro, L).
"At the same time, we know that European industry is in a tough situation with inflation and the energy crisis. Therefore, we have ensured that this ambition is introduced in a responsible way that gives our industry the breathing space it needs in this situation" (Jessica Polfjärd, M).
"In order to protect households from unreasonable price increases on, for example, fuel and rents, households will be compensated. We make sure that everyone can participate in the green transition in a fair way" (Heléne Fritzon, S).
“This is an inadequate package. We know that as soon as we hammered through it, we have to take new steps. We on the left will do that both at home in Sweden and here in the EU" (Malin Björk, V).

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