Designing an EU climate policy: What is Fit for 55 and how it affects shipping?

fit for 55

( With Fit for 55, Europe is the global first mover in turning a long-term net-zero goal into real-world policies, marking the entry of climate policy into the daily life of all citizens and businesses.

A greener Europe is one step closer. After having developed a strategy for a more sustainable Europe through the Green Deal, the European Union launches its implementation through the “Fit for 55” package. As one of the world’s largest CO2 markets, the EU’s ‘Fit for 55’ package aims to set the EU on course to slash  greenhouse gas emissions by 55% by 2030 and try to hit net zero emissions by 2050.

What exactly is Fit for 55?

Announced on July 14 2021, “Fit for 55” is the European Commission’s ambitious plan to put the decarbonization strategy into practice and set the EU on course to slash greenhouse gas emissions by 55% by 2030.The directive maintains that a policy targeting higher energy efficiency and a switch from fossil-based heat supply to renewable sources is imperative.

European Community Shipowners’ Associations (ECSA)

European shipowners welcome the Fit for 55 climate package but fear lack of consistency among proposals may undermine increased climate ambition.

ECSA welcomes the increased climate ambition of the ‘Fit for 55’ climate package published today, recognising that the climate crisis is one of the greatest humanitarian, economic and environmental challenges our societies are facing. However, European shipowners notice a lack of consistency among some of the proposals of the package which may undermine its environmental objectives and therefore urge for more consistency.

Even though we would have preferred an international solution for shipping, we welcome the increased climate ambition of the EU and we recognise that shipping should contribute its fair share to address the climate crisis, at EU level as well” said Claes Berglund, ECSA’s President.

ECSA advocates for a dedicated fund to be set up under the EU ETS to stabilise the carbon price, which is especially important for the many small and medium sized shipowners. Importantly, generated revenues should support the sector’s energy transition. ECSA also welcomes the recognition of the role of the commercial operator in the proposal for the inclusion of shipping into the EU ETS. It´s important for the European shipowners that the commercial operator should bear the costs of the ETS.

It is of utmost importance that the revenues from ETS are used to support the decarbonisation of shipping and not added to Member States’ general budgets. A sector-specific fund has already received significant support from the European Parliament, NGOs and industry stakeholders and we sincerely hope that the Member States will take this strong signal into consideration going forward. The new Directive must also ensure that all supply chain stakeholders including the commercial operators have the proper incentives to make climate-conscious decisions” added Claes Berglund.

ECSA supports a phase-in period under which an increasing percentage of the emissions of the sector is subject to the ETS. However, it is important that sufficient time is provided for the gradual inclusion of the sector’s emissions in order to create investment signals and to identify potential errors in the system design.

European shipowners welcome the objective of the FuelEU Maritime initiative to foster the market uptake of cleaner fuels that are currently not commercially available. However, the proposal does not seem to be consistent either with other proposals of the ‘Fit for 55’ climate package or with the overall increased climate ambition.

Incentivising the uptake of biofuel blends purchased outside the EU could create an enforcement minefield putting at risk the achievement of emissions reductions. While it is of outmost importance that flexibility is safeguarded, the introduction of double counting or double requirements must be avoided. Τhe principal obligation for compliance with any new standards should rest with the EU fuel suppliers” said Martin Dorsman, ECSA’s Secretary General.

European shipowners also point out that a financial penalty on ships when the infrastructure for Onshore Power Supply (OPS) is not available in a port, penalises the wrong entity. “At the very least, ships must be exempt from the OPS requirement, when the port infrastructure is not available or not compatible with ships’ equipment” concluded Martin Dorsman.

On the Energy Tax Directive, removing the current tax exemption for fuel is not a consistent way forward. ECSA will work closely with the MEPs and the Member States so that the Directive exempts all sources of energy delivered to ships from taxation as the international nature of shipping creates difficulties to enforce a tax on any energy source.

ECSA will analyse thoroughly the proposals of the ‘Fit for 55’ climate package and is looking forward to a close dialogue with EU policymakers to ensure that climate ambitions are met and that the competitiveness of  European shipping is safeguarded.

Paper: A "Fit for 55" Package Based on Environmental Integrity and Solidarity

This paper makes the case for a strong European climate governance based on the principles of environmental integrity and European solidarity. It advocates for a smart mix of EU-level carbon pricing and companion polices to help Member States in fulfilling their goals. Click below to download.



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