The president of the Port Authority of Valencia (PAV), Aurelio Martínez, has called for a review and improvement of the measures to implement the Emissions Trading System (ETS) for maritime transport included in the European Union’s ‘Fit for 55’ legislative package so that they are truly effective in the fight against climate change. For the Port Authority of Valencia (PAV), the proposal, as it is currently designed, will have a “null” impact on the overall reduction of emissions in the maritime sector, and may even worsen the situation. Moreover, it will lead to a reduction in activity and a loss of connectivity of European ports which will result in a reduction in the competitiveness of the exports of companies.
The ‘Fit for 55’ package envisages, among other actions, that maritime transport should be included in the European Emissions Trading Scheme (ETS). Specifically, it implies for the sector that shipping companies will pay 100% emission rights for journeys between EU ports and 50% for journeys to and from the EU. These targets will have an effect on the EU geographical framework, but will still have a negative impact worldwide as they do not affect third countries. “In general, we share the objectives of this programme, but as far as emissions are concerned, as it stands, the impact on the reduction of greenhouse gases is zero. It does not solve the problem, it simply shifts it. The objective of decarbonisation will not be achieved as there will be carbon leakage from ships that will go to environmental havens in non-EU ports,” explains the chairman of the PAV.
In his report, which can be downloaded at this link, Aurelio Martínez explains it with the following example: “If on the crossing between Shanghai and Valencia the boat calls at any of the non-member ports in the Mediterranean, the shipowner does not have to pay a penny for what has been spent and emitted during this part of the crossing, which is by far the longest. What are shipping companies going to do to avoid these costs? Easy: make a call at, for example Tangier and then continue on to Valencia”.
Moreover, this measure may even increase CO2 emissions for two reasons: “Firstly, because the additional stop on the crossing may increase the number of nautical miles sailed. Secondly because in order to benefit from these savings, the shipowner may concentrate cargo in these ports and use feeders (smaller boats) to carry cargo from the south of Spain or even Valencia to Tangier for example. Given that size is key when it comes to evaluating environmental efficiency, such shifting of destinations and cargo could easily result in an increase of global CO2 emissions,” the president of the PAV points out.
Impact on the European economy and loss of connectivity
For the president of Valenciaport, the current text with which the EU is working will generate a displacement of transhipment from Spanish and EU ports to these environmental paradises, which will lead to an impact on income and on the direct and indirect employment generated by this activity. It will also mean a loss of connectivity of European ports. There will be fewer direct lines, which will increase costs for exporters and reduce trade flows with the countries with which this connection is lost.
“If connectivity is vital, the impact of such a scenario could be a significant fall in the competitiveness of our exports,” points out Aurelio Martínez. ” The result of all of these impacts will be the loss of production and jobs in the affected sectors, especially the lowest value-added jobs, where the increase in costs and loss of competitiveness have a greater impact. We must consider the played by ports in the channelling of Spain’s foreign trade sector (60% of exports and 85% of imports)”, he adds.
In this context, Valenciaport is working, together with the Port Authorities, Puertos del Estado and the European Sea Ports Organisation (ESPO), on alternative proposals to reform and improve the European Commission’s text, such as extending the deadline for the introduction of the tax or the inclusion of neighbouring non-EU transhipment ports.
Aurelio Martínez explained some of these more efficient options that do not generate significant collateral effects. “For example, let’s assume that emissions from the maritime transport sector are on average 30 grams per tonne transported per mile. For this, we set an objective, we want to reduce these emissions by half and we establish a deadline of 2030. We determine a path of linear reduction (2022 30 grams; 2023 29 grams; 2024 27 grams; 2025 25 grams; and so on until 2030 15 grams). Thereafter, all ships which, as a consequence of employing modern technologies or fleet upgrades find themselves below these targets will not be penalised. CO2 allowances should be bought in the proportion deemed appropriate for the type of vessel only by those above this trend line, and the obligation to acquire emission rights will apply irrespective of stops in third ports outside the Community,” said the PAV chairman. Furthermore, if the fleet is less than 20 years and that all those launched in recent years are extremely efficient with average emissions well below required levels, over 8 years, we are encouraging new additions to meet out requirements so that by the 2030 the objective can be met.
Fit for 55
The European Commission has published its ‘Fit for 55’ legislative package, which supports its commitment to reduce net greenhouse gas emissions by at least 55% by 2030. The package presents a policy action plan on how to achieve Europe’s climate targets, in line with its ambition to become the first climate-neutral continent by 2050. These interconnected proposals aim to align climate, energy and transport policies with the objectives agreed in the European Climate Act, translating climate goals into concrete actions. They include:
- Applying emissions trading to new sectors and tightening the current EU emissions trading system.
- Increased use of renewable energies and greater energy efficiency
- Faster deployment of low-emission transport modes and the infrastructure and fuels to support them.
- An alignment of fiscal policies with the objectives of the European Green Deal
- Measures to prevent carbon leakage and tools to preserve and increase our natural carbon sinks.