(www.MaritimeCyprus.com)Â Who Gets Shipping's ETS Billions? New Study Reveals Where Maritime Carbon Revenues Go
As the European Commission prepares to unveil its long-awaited review of the EU Emissions Trading System (EU ETS) on 15 July, a new study has cast fresh light on one of the industry's most pressing questions: where does the money paid by shipping actually end up?
Shipping Pays Billions - But Where Does the Money Go?
European shipowners estimate that the maritime sector contributes between €7.7 billion and €9 billion every year through carbon allowance purchases under the EU ETS. Yet despite these unprecedented contributions, only a very small proportion of the revenue is finding its way back into maritime decarbonisation.
The study estimates that, assuming a carbon allowance price of €100 per tonne, Member States collectively receive approximately €7.7 billion annually from shipping-related ETS auctions. At a more conservative carbon price of €85 per tonne, revenues would still exceed €6.6 billion. These figures exclude funds channelled directly into EU-level financing mechanisms such as the Innovation Fund.
The Biggest Winners May Surprise You
Perhaps the study's most striking conclusion is that ETS revenues are not distributed according to the size of a country's shipping industry, merchant fleet or port activity.
Instead, auction revenues are allocated using historical industrial emissions, meaning countries with large industrial sectors receive a disproportionately higher share of shipping-generated carbon revenues.
As a result:
- Germany emerges as the largest beneficiary, receiving an estimated €1.7 billion annually under the €100-per-tonne scenario.
- Czechia, despite being landlocked, is projected to receive more ETS revenue than major maritime nations such as Cyprus, Malta, and even Denmark.
This allocation method highlights an increasingly controversial disconnect between the sector generating the revenue and the countries ultimately benefiting from it.
A Critical Moment for the ETS Review
The European Commission is expected to publish its review of the EU ETS Directive on 15 July, establishing the legislative framework for the post-2030 carbon market.
However, reports suggest that significant disagreements remain within the Commission. An early draft prepared by DG CLIMA reportedly faced objections from several other Directorates-General, raising expectations that intense lobbying will continue until the proposal is formally adopted.
The outcome could have major implications for how shipping contributes to—and benefits from—the EU's climate policies.
Revenue Is Not Flowing Back to Shipping
Although Article 10(3) of the ETS Directive explicitly identifies maritime decarbonisation as an eligible use of auction revenues, Member States are not legally required to earmark any portion of those funds for shipping.
This has created a significant funding imbalance.
According to the European Commission's 2025 Carbon Market Report, only around 5% of historical ETS revenues have been invested in industrial decarbonisation, while maritime projects have received almost no dedicated support.
So far, only France and Estonia have specifically committed ETS revenues to maritime initiatives. Most Member States continue to direct shipping-generated income toward broader national climate and budget priorities.
ECSA Calls for Mandatory Reinvestment
Using the findings of the study, ECSA is urging EU policymakers to introduce mandatory reinvestment mechanisms during the upcoming ETS revision.
The organisation argues that a defined share of auction revenues should be ringfenced for:
- Sustainable marine fuels;
- Green fuel production infrastructure;
- Zero-emission vessel technologies;
- Port decarbonisation projects;
- Maritime innovation and research.
Current Commission discussions reportedly include a proposal for approximately €3 billion in free ETS allowances to support clean maritime technologies and fuels.
While welcomed by industry, shipowners argue that voluntary measures alone will be insufficient unless Member States are also required to reinvest part of the billions they receive from shipping.
Ships Are Ready but unfortunately, Fuel Supply Is Not
The report also highlights another growing concern: investment in green vessels is significantly outpacing the availability of low-carbon fuels.
European shipowners currently account for approximately 44% of the global orderbook for vessels capable of operating on sustainable fuels.
Yet Europe produces only around:
- 10% of global sustainable fuel production, and
- less than 5% of those volumes are currently allocated to the maritime sector.
Meanwhile, approximately 74% of global sustainable fuel production projects are located in Asia, raising concerns that Europe's shipping industry may struggle to secure sufficient fuel supplies to meet future emissions targets.
Carbon Costs Expected to Rise Sharply
Although EU carbon allowances are currently trading at around €80 per tonne, market analysts expect prices to continue climbing as emissions caps tighten and additional sectors enter the ETS.
Current forecasts suggest average allowance prices could reach:
| Period | Estimated EUA Price |
|---|---|
| 2026-2027 | €80-€107/t |
| By 2030 | €145-€222/t |
If maritime emissions remain broadly stable, the study estimates that shipping could contribute around €90 billion to the EU ETS over the next decade, requiring companies to surrender approximately 900 million emission allowances.
The Growing Debate
The report is expected to intensify debate ahead of the Commission's review.
For many shipowners, the central issue is no longer whether shipping should contribute financially to Europe's climate ambitions, but whether the billions generated from the sector should be systematically reinvested into enabling its own decarbonisation.
As policymakers prepare to shape the next generation of the EU ETS, the question is becoming increasingly difficult to ignore:
If shipping is paying for the transition, shouldn't a meaningful share of those revenues be invested back into shipping?
For more interesting details, you can download the full study reports by clicking below:
Source:Â ECSA
