EU greenhouse gas emissions trading scheme extended to maritime activities

TALLINN – To reduce greenhouse gas emissions in the maritime sector, the sector is integrated into the European Union's emissions trading system (ETS).

"To halt climate change, all sectors must review their greenhouse gas footprint. The emissions trading system sets a specific price for emissions, which encourages businesses to innovate, meaning they will seek smart and environmentally friendly solutions to reduce emissions," Estonia's Minister of Climate Yoko Alender said in a press release.

The emissions trading scheme will be extended to passenger and merchant ships of 5,000 gross tonnage or more. Ten companies will be affected by the change in Estonia. The system will not apply to ferries.  

Part of the ETS revenues will be returned to Estonia.

"The government recently decided to allocate 25 million euros of ETS revenues to promote ship conversion in Estonia. This will help ships to switch to new cleaner technologies and increase Estonia's competitiveness," Alender said. 

The directive will be transposed into Estonian law by the Atmospheric Air Protection Act, which the Ministry of Climate put on an approvals round on Dec. 20. The system expands from 2024. In the first year, shipowners have to pay for 40 percent of emissions, in 2025, for 70 percent of emissions, and from 2026 for all emissions.

Companies participating in the ETS have reduced their emissions by 41 percent in Europe since 2005. Estonian companies have reduced their emissions by 58 percent over the same period. The more businesses reduce their emissions, the less they need to buy units, thereby reducing both costs and environmental impact.