FEPORT calls for continuous monitoring of ETS and FuelEU impacts on business activity and employment in EU ports
Brussels, November 18th, 2022
FEPORT supports the Fit for 55 proposals as key building blocks to allow the decarbonization of the EU economy towards climate neutrality by 2050, including those proposals aimed at the greening of maritime shipping such as FuelEU Maritime and the EU ETS revision.
FEPORT is however concerned that the geographical scope of these pieces of legislation could harm the competitive position of EU seaport terminals, as their extra-EU application means that shipping companies can avoid their financial implications by adding a call to a non-EU port.
As pointed out by academic studies, evasive port calls can already happen at very low carbon prices of €6/MT of CO2 in the case of Algeciras (Spain) and €25/MT in the case of Piraeus.
FEPORT welcomes the European Parliament’s and the Council’s proposed measures to address this topic in the framework of the trilogue negotiations on FuelEU Maritime and EU ETS.
- AM 63 of the EP position on FuelEU Maritime, which requires the EU Commission to continuously monitor cargo diversion at the expense of EU ports, while requiring the Commission to propose legislative measures to address this if any negative impact on EU ports is established;
- The proposals of the European Parliament and the Council to include a definition of port of call which excludes stops in non-EU (container) transhipment ports, which are ports where transhipment operations constitute more than 60/65% of the total volumes and are located less than 300 nautical miles outside of the EU. In this case, the stops at these ports will not allow shipping companies to avoid the financial consequences of EU ETS.
However, cargo diversion via feeder traffic remains a risk. EU ports may lose cargo irreversibly if risks regarding cargo diversion are not adequately monitored and if the EU ETS system is not put in place gradually via a phase-in.
FEPORT therefore recommends that:
- The scope of ETS and timelines as proposed by the EU Commission and endorsed by the Council are maintained.
- The EU Commission monitors as of day one impacts regarding carbon leakage as well as cargo diversion at the expense of EU ports, as is currently proposed by Parliament in its position on FuelEU Maritime. Such a monitoring scheme should look at the cumulative impact of both FuelEU and EU ETS and also take into account the effects of the current energy crisis on the competitiveness of EU seaport terminals using electrically propelled equipment.
- EU Commission adopts immediate measures if any impact regarding carbon leakage or cargo diversion is indeed established. The definition of a non-EU (container) transhipment port could for instance be amended
FEPORT hopes that the trialogue negotiations will lead to the adoption of provisions that will protect EU ports from the risks of cargo diversion and their economic and social consequences.
Note that the studies done so far analyze impacts based on the original proposal of the EU Commission, which applies emissions trading to 50% of emissions on extra-EU voyages. The conclusions could be different if 100% of emissions on extra-EU voyages would be covered as proposed by Parliament, or when the cumulative impact of both FuelEU and ETS would be assessed.
 A non-EU transhipment port is defined in amendment 492 as “a transhipment port in a non-EU neighbouring country at a distance of less than 300 nautical miles from a port under the jurisdiction of a Member State, where the movement of one type of cargo by way of transhipment operations exceeds 60 % of the total traffic of that port;” In the Council’s General Approach, a 65% limit of transhipment traffic is followed (see recital 18a, article 1(2) (wa), article 3g(1)).
 I.e., cargo is dropped off in a non-EU transhipment port and then distributed via smaller (feeder) vessels to EU ports.
 The current definitions proposed by Parliament and the Council cover non-EU transhipment hubs that could be used for evasion such as Tanger Med (Morocco), but evasive practices can still happen via non-EU ports where the amount of transhipment operations constitute less than 60/65% of the total traffic.
For more information, please contact:
Mr Maarten Boot, Policy Advisor