FEPORT (Federation of European Port Associations) emphasized the importance of the cargo-based scheme as an effective tool in preventing carbon leakage in ports in a statement. This scheme, which has been proposed as one of the amendments in the context of ETS (Emissions Trading System), can help member countries of this union protect their ports from carbon leakage while steering the transport industry towards reducing carbon emissions.
Background and Necessity of the Scheme
The ETS Maritime proposal was first introduced in the summer of 2021 and included the extension of emissions trading to international voyages. However, since then, there have been significant criticisms from port stakeholders due to concerns regarding evasion of financial responsibilities based on the EU's carbon pricing mechanism. These concerns were partially addressed in the final text that was approved in May 2023.
In recent years, the strategic role of ports has gained more attention, especially in light of global crises such as the COVID-19 pandemic and military conflicts near borders. These crises highlight the importance of ports as energy hubs and their role in military mobility.
FEPORT's Suggestions for Improving the Scheme
FEPORT appreciates the recognition of this role in the European Commission's proposal and the reforms suggested by Members of the European Parliament, believing that maintaining transshipment hubs in Europe is not only vital for preserving port competitiveness but also a prerequisite for broader industrial competition and controlling international maritime logistics chains.
Currently, policymakers are considering three anti-evasion measures: 1. Distance-based Action which gradually reduces the number of permits required from shipping companies based on the distance traveled between the EU entry port and the third country port; 2. ETS Exemption for certain EU ports based on their level of international competition; 3. Cargo-based Action which provides discounts for incoming ships based on the share of transshipped containers that are unloaded and not allocated to the EU market.
Ms. Lamia Kerdjouj, Secretary General of FEPORT, pointed out that the first two proposals cannot achieve the intended goals, stating: "The aim of the anti-evasion measures is to remove incentives for shipping companies to change routes or entry ports to reduce exposure to the EU's carbon pricing mechanism. Conversely, the distance-based action may compel companies to reduce the number of stops at their ports."
She also added: "Exempting certain specific ports will benefit some at the expense of others and raise concerns about fair competition in the domestic market."
FEPORT believes that the cargo-based action is immune to these issues due to its focus on the destination of the cargo and can effectively help prevent carbon leakage. The Secretary General of FEPORT emphasized that this action should be strengthened and extended to incoming voyages as well.
