The trading of greenhouse gas emissions in the European Union now extends to shipping. In 2024, shipping companies must buy allowances for 40 percent of their emissions, and in 2027, already one hundred percent. What does it mean?
For example, in Finland, it was calculated in 2022 that the costs of trading emission allowances will be around half a billion euros, which is only half a percent of the value of all Finnish foreign trade (66 billion euros). This means that the average price increase of Finnish products will be less than one percent. What about Estonia, how big is this additional cost here?
Emissions trading is just the beginning of the transition to green shipping. This year, both the International Maritime Organization (IMO) and the European Union have established several additional mechanisms to steer shipping towards carbon neutrality by 2050.
The most important of the control measures is the gradually tightening obligation to use carbon-neutral fuel (FuelEU Maritime). This requires ships to gradually switch to low-CO2 fuels. For comparison, a 2020 baseline of 91.16 grams of CO2 per megajoule (MJ) produced is taken. By 2025, it must decrease by two percent, by 2030 by six percent, and by 2050 by 80 percent. In other words, in practice, shipping must abandon traditional fossil fuels.
These rules change and have already changed the technologies, fuels and operating models used in shipping. Over the past decade, shipping has already achieved significant savings in terms of fuel consumption and greenhouse gas emissions (e.g. by reducing the speed of ships).
Innovations have been introduced in shipbuilding (e.g. a new design of the ship’s hull and the use of wind energy) and the newest ships are already built to use emission-free fuels.
At the same time, the changes in shipping bring opportunities to the maritime sector. It is very important that Estonia starts to take environmental responsibility and especially innovations as part of the development work of the maritime cluster. Its larger goal should be to increase the competitiveness of the Estonian maritime cluster, especially in the field of green technology and low-emission shipping. Start-ups should also be involved.
In summary, it can be said that this way it is possible to reach many new solutions that will have a positive effect to both the Estonian shipping and the export products of the maritime sector.
The opinion article was published in Estonian on the ERR opinion portal 10.2.2022.
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