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Historic Extension of EU’s Carbon Market Gets Green Light from Parliament

The European Parliament votes in favour of including shipping and road transport in the Emissions Trading System (ETS) for the very first time.

The EU Parliament has voted in favour of extending its carbon market to shipping and road transport, two weeks after it also voted on expanding coverage to all departing flights from the EU. Transport & Environment (T&E) has welcomed this historic expansion and calls on national governments to adopt an equally ambitious position in the European Council later this month.

Sofie Defour, climate manager at T&E: “This marks a historic day for European climate policy. Expanding the EU’s flagship cap and trade scheme ensures that more of Europe’s polluters are made to pay.”

After a 10 year fight, big shipping polluters will finally be made to pay. The Parliament has voted in favour of including all ships above 400 gross tonnage and offshore vessels — like those servicing offshore gas and oil facilities — in the EU’s carbon market. Polluters will have to pay for all greenhouse gases they pollute — CO2, methane and nitrous oxide — when sailing within the EU and 50% of voyages outside of the bloc until 2027. After 2027, the scope of the carbon market will be automatically extended to 100% of ships entering and leaving European ports. Lawmakers did, however bow to pressure by including exemptions for ice-going ships and ships traveling to outermost regions, delaying the decarbonisation of these vessels.

For the road ETS, MEPs voted for the new carbon price to be equally split between oil companies and consumers. Fuel suppliers will be prohibited from passing on more than half of the costs to end-consumers.

Sofie Defour added:

“At a time when oil and gas majors are making bumper profits off the war in Ukraine, this is a strong step towards a just transition. If this provision from the Parliament becomes law, it will finally make oil majors pay back to society and allow the EU to start shaving off part of their huge profit margins.”

But MEPs also watered down the Commission’s carbon pricing proposal for road transport and buildings by exempting 75% of these sectors’ emissions until 2029. While it is fair to make commercial users transition faster, 2029 is too late to include households. Instead wealthy households and oil majors should pay from the start, while the Social Climate Fund compensates poorer households through income support and investments, advises T&E.

Courtesy of Transport & Environment.

 
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Transport & Environment’s (T&E) vision is a zero-emission mobility system that is affordable and has minimal impacts on our health, climate and environment. Created over 30 years ago, we have shaped some of Europe’s most important environmental laws.

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