Danish Shipping: Shipping’s ETS payments should be used to develop green fuel production in Europe

September 24, 2025, by Naida Hakirevic Prevljak

Funds collected as part of the EU’s CO2 Emissions Trading System (ETS) could be used to establish and scale up the production of green fuels in Europe, Danish Shipping said.

Right now, the global shipping industry is holding its breath and looking to London, where the International Maritime Organization’s (IMO) Net-Zero Framework will be put to a final vote on October 17.

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Danish Shipping said it is giving its full backing to the agreement and urges its adoption.

“The agreement at the IMO will be a gamechanger for the decarbonisation of international shipping once it is adopted. Then it will be full speed ahead – and Danish shipping companies are ready. But a key prerequisite for success in climate transition is that a lot more alternative fuels are produced than is the case currently. And that must also happen in Europe,” Jacob K. Clasen, Deputy CEO of Danish Shipping, pointed out.

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“It is only logical that the funds we ourselves contribute through quotas should also be used to create the production of the fuels we will sail on in the future,” Clasen added.

The EU has already introduced climate regulation of shipping through the EU ETS and FuelEU Maritime. In 2026, when ETS is fully phased in, Danish shipping companies are expected to contribute DKK 3.8 billion (about €509 million) to the system. Danish Shipping proposes that ETS revenues should be earmarked as a support scheme for the green transition of shipping – including both production and offtake.

“Those funds must be used to accelerate the build-up of green fuel production in Europe. Our shipping companies are ready to switch, but we cannot afford to wait for other regions to outpace us. We are facing investments worth billions. It is only logical that the funds we ourselves contribute through quotas should also be used to create the production of the fuels we will sail on in the future,” Clasen told a local shipping media outlet.

It is also crucial to ensure proper alignment between EU climate regulation and a forthcoming global IMO regime.

“The EU must adjust its rules to a global agreement. It must not result in double regulation and double payment. Ideally, we should have one system for regulating shipping’s CO₂ emissions,” Clasen concluded in an interview with Søfart.

Scaling up clean fuel production in Europe is one of the key recommendations of the “Future of European Competitiveness” report published last year by Mario Draghi, former European Central Bank President and one of “Europe’s great economic minds”. In the report, Draghi delivered recommendations to enhance the competitiveness of the European economy.

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