**Title: Fairer EU ETS Must Return More Revenue to Shipping, Executive Says**
In a recent statement, Philippos Ioulianou, managing director of EmissionLink, emphasized the need for equitable treatment of the shipping sector in the proposed expansion of the EU Emissions Trading System (EU ETS). As the European Commission plans to broaden the ETS to include offshore activities starting in 2027, followed by certain vessels ranging from 400 to 5,000 gross tonnes by 2029, Ioulianou raised concerns about potential double charging and called for greater reinvestment of revenues into maritime decarbonization initiatives.
Ioulianou highlighted that while the expansion of the EU ETS could support Europe’s climate objectives, it does not guarantee enhanced effectiveness. He stated, “Expanding the EU ETS will not automatically make it more effective. The system must be coherent, proportionate and capable of delivering practical decarbonisation.” This sentiment reflects a growing apprehension within the shipping industry regarding the implications of overlapping regulatory frameworks.
A significant concern is the potential for shipping companies to incur overlapping liabilities if the EU ETS operates concurrently with a carbon-pricing mechanism introduced by the International Maritime Organisation (IMO). Ioulianou cautioned against this scenario, asserting, “Shipping should not pay twice for the same tonne of emissions.” He advocated for the establishment of an automatic and transparent system to recognize payments and reconcile liabilities between the two frameworks.
The inclusion of offshore activities in the EU ETS is expected to introduce additional complexities. Vessels engaged in offshore operations may remain at worksites for extended periods, leading to fragmented responsibility for their operations, fuel consumption, and emissions among various stakeholders, including owners, charterers, contractors, and project developers. As a result, clear definitions of responsibility for emissions monitoring, purchasing allowances, and managing carbon-price exposure will become increasingly essential in charterparties and project agreements.
Moreover, the anticipated entry of smaller operators into the EU ETS in 2029 raises concerns about disproportionate compliance burdens. Many of these smaller entities may lack the specialized teams, established data systems, and carbon-market experience that larger shipping companies possess, potentially hindering their ability to comply effectively with the new regulations.
Despite these challenges, EmissionLink expressed support for certain aspects of the EU ETS proposals, particularly the alignment of EU Monitoring, Reporting, and Verification requirements with the FuelEU Maritime reporting framework. Additionally, the company welcomed measures aimed at preventing companies from circumventing their obligations through transhipment.
However, Ioulianou stressed that carbon pricing alone would not suffice to achieve meaningful emissions reductions in the shipping industry. He asserted, “Carbon pricing must be matched by practical investment.” He called for a substantial portion of the revenue generated from shipping under the EU ETS—specifically, at least 50 percent—to be reinvested into initiatives that promote maritime decarbonization at the national level. These initiatives could include sustainable fuel development, port infrastructure improvements, vessel retrofits, and the adoption of credible energy-efficiency technologies.
In conclusion, Ioulianou underscored that the credibility of the EU ETS will hinge not on the amount of revenue it generates, but rather on its ability to treat the shipping industry fairly and support its efforts to reduce emissions. As the EU moves forward with its climate agenda, the balance between regulatory frameworks and practical investment will be critical in shaping the future of maritime decarbonization.