The proposal for the revision of the European Union Emissions Trading System (EU ETS) put forward this summer by the European Commission in the right direction, but it could be even more effective ( of 17 July 2026). This, in summary, is the position on the proposal reiterated today by Transport & Environment (T&E), which believes that can be improved by anticipating the inclusion in the system of smaller naval units, limiting the derogations for the transhipment of containers in ports and allocating a share of the ETS allowances to European e-fuels.

T&E, which is the leading environmental organization to deal with sustainable mobility, highlighted the success of the EU ETS, which since its launch in 2005 has been has become the Union's main climate tool and has had a success, helping to reduce emissions from the sector industry, and maritime air transport, generating at the same time, over 230 billion euros in auction revenue.

A system thanks to which - the association highlighted - the EU ETS auctions, the mechanism through which a portion of the allowances is sold directly by the authorities companies subject to the system, since its launch have generated more than €230 billion in revenue for Member States and for the EU. In addition, emissions from sectors covered by the EU ETS - T&E pointed out - have decreased by about 50% compared to the levels, demonstrating the effectiveness of a rigorous decreasing emission ceiling, combined with the of a carbon price.

Therefore, the association believes that the post-2030 ETS should preserve the fundamental principles that have decreed its success, while adapting it to support the next phase of industrial and energy transformation. This means - for T&E - maintaining a maximum limit of emissions robust and predictable, in line with the 2040 climate targets, while ensuring stability and flexibility for investments. This - the association specified - also requires that revenues from the ETS be used in a way that to accelerate investments in the decarbonization, electrification and clean technologies.

Regarding the proposal for the revision of the ETS formulated by the EU Commission for Maritime Transport, T&E considers that one of the main innovations of the proposal, namely the extension of the scope of the system to ships between 400 and 5,000 gross tons, expected to from 2031, is a positive first step, however too slow and incomplete.

Recalling that the proposal provides for the inclusion of the most small in the monitoring, reporting and verification (MRV) system since 2029 and in the ETS from 2031, with the exclusion of certain categories of ships including ro-pax and passenger ships, cruise ships, bulk carriers, container ships and reefer ships, the association has complained that this would lead to exclusion from the about one third of emissions from small ships, including those of certain types of units that have high electrification potential. T&E therefore proposes to bring forward the inclusion in the MRV to 2028 and the inclusion in the ETS to 2029, while extending the scope to all categories of ships under 5,000 GRT. T&E also calls for measures specific to facilitate the electrification of smaller size.

Another important part of the Commission's proposal concerns the risk of carbon leakage and elusive behaviour. For To combat these phenomena, the Commission intends to include additional non-EU ports among those considered relevant for the purposes of of the ETS. The new criteria include ports within 300 miles nautical from the EU with a transhipment share of at least 50%, or ports within 150 nautical miles equipped with infrastructure relevant for transshipment, such as docks and ship-to-shore cranes. In parallel, however, the proposal introduces a new derogation for container ships with a capacity of at least 10,000 TEUs engaged in transhipment activities operating on exceeding 300 nautical miles, a derogation that would allow shipowners, until 31 December 2035, to return a number of lower allowances than actually emissions verified. According to T&E, this measure risks creating a distortion of competition. The association specified that, in a depending on the number of containers tranhipped, the derogation may Leaving up to 2.1 million tonnes of CO2 out of the ETS equivalent per year, equal to 6.4% of the emissions of the container ships, with a possible loss of revenue for the Union up to €2.3 billion in the extreme hypothesis in which all containers are transhipment. T&E asks therefore to reject not only this new derogation, but also the extension until 2035 of the derogations already provided for the ice-class ships, the outermost regions, small islands and links between Cyprus and Greece. The extension of these exemptions, According to the association, it would result in an estimated loss of revenue in 3.5 billion euros in the period 2030-2035.

T&E's analysis then focused on the proposal, which is considered probably the most significant on an industrial level, of the introduction of the Sustainable Maritime Alternative Propulsion (SMAP), a ETS allowances to reduce the cost differential between fuels and conventional technologies and low-energy alternatives or zero emissions. The mechanism should make available 110 million allowances between 2028 and 2040, with an indicative value of around €15 billion, intended to support fuels electrification and wind propulsion. The proposal provides for different levels of coverage of the price differential: 90% for RFNBO fuels, 90% also for Clean propulsion, 80% for low-carbon hydrogen and fuels low carbon and 55% for biogas and advanced biofuels. È an increase of 10 percentage points is also envisaged for fuels whose raw materials are of European origin and a Five-point bonus for clean propulsion technologies installed at a European shipyard. For T&E, the duration overall of 13 years is a positive element because allows long-term planning for technologies and fuels still far from full commercial maturity. According to the association, the differentiation of support for RFNBOs from biofuels. Transport & Environment warned that The risk is that the absence of a restricted destination of the quotas brings together a substantial part of the resources towards already more mature technologies or fuels, and supported by other instruments, in particular under the European FuelEU Maritime Regulation. According to T&E, this could mainly benefit advanced biogas and biofuels, which already have production chains and infrastructure bunkering, while e-fuels would risk not receiving sufficient support. That is why T&E proposes to reserve part of the SMAP allowances for e-fuels, including those produced in the EU, with the aim of ensuring that synthetic fuels can be developed as early as 2028 and contribute to the decarbonisation of maritime transport, especially in the post-2035 phase.

In addition, the association proposes to introduce a mechanism for advance booking of the fees similar to that provided for the SAF in aviation. A part of the allowances should therefore be made available in advance to allow shipowners to sign long-term contracts with European producers of e-fuel. According to T&E, the impossibility of entering into agreements of long-term offtake is one of the reasons why Around 80% of European e-fuel projects are located still in the phase prior to the final investment decision. This, for T&E, would also have a political value European industry: support for the ETS should not be limited to reduce the cost of alternative fuels for shipowners, but should contribute to the creation of a capacity in Europe e-fuel production capable of powering the fleet in the long run period.

Finally, T&E calls for the restriction of the possibilities of access to support from externally produced fuels of the EU. The proposal, in fact - explained the association - would allow in certain circumstances to benefit from indirectly of the SMAP mechanism also by producers non-European countries, in particular in the case of links between the EU and ports of third countries included in undefined "corridors for maritime transport".

Finally, recalling that the revision of the EU ETS proposed by the Commission also takes into account the possibility that the International Maritime Organization (IMO) to introduce its own global carbon pricing mechanism, containing a reference explicit deduction mechanism intended to prevent operators pay twice for the same issue if adopted and applied a comprehensive framework containing a system of carbon pricing, T&E noted that such a deduction would be however, subject to the adoption and effective application of a mechanism by the IMO. According to T&E's analysis, if the current Net-Zero Framework currently at the IMO Negotiations Centre for the Decarbonisation of the shipping, the overlap with the EU ETS would, however, concern only about 15% of European shipping emissions.