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The European Commission has proposed adding shipping to the EU’s carbon market for the first time to make it greener.

Under the EU plan, shipping would be added to the European Union Emissions Trading System (ETS) gradually from 2023 and phased in over a three-year period, reports Reuters.

'Pay to pollute'

Ship owners will have to buy permits for ships sailing within the EU or face possible bans from EU ports. The proposals will also cover 50% of emissions from international voyages starting and ending in the bloc.

According to Lloyds List, the scheme would see 70% of emissions on voyages to the European Economic Area taxed. 

The ‘Fit for 55’ package includes 10 proposals to cut emissions by 55% by 2030, which will have wide-ranging international repercussions for both shipping emissions and costs.

Big price tag

A study into the cost of decarbonising the shipping industry to meet UN targets put it at more than $1 trillion, reported Reuters.

The study, on behalf of the non-profit Getting to Zero Coalition, said the bill for fully decarbonising shipping by 2050 could be as high as $1.9 trillion.

A research note by Fitch says that green policies will increase costs for vessel operators. However, it says it expects “competition in the industry to remain fierce, leaving little room for shippers to pass through increased costs to customers”. 

For more than a decade shipping has avoided the EU’s system of pollution charges even though 90% of world trade is transported by sea and global shipping accounts for nearly 3% of the world's CO2 emissions.

Go global

Commentators have called for a global strategy on the issue in Seatrade Maritime News.

With China is due to start what is billed as the world’s biggest emissions trading scheme in a few months, panellists on a webinar said the two regional initiatives could prevent the creation of any global scheme in future.