FEPORT raises alarm over potential cargo diversion as EU ports brace for impact of EU ETS

Members of the Federation of European Private Port Operators (FEPORT), meeting in Antwerp for their General Assembly, expressed growing concerns about potential cargo diversion from EU ports due to the forthcoming implementation of the EU ETS for shipping in 2024.

Illustration; Image by Offshore Energy

The EU ETS directive for the maritime sector aims to address emissions in the shipping industry by introducing carbon tax to cover their emissions and encourage more sustainable practices.

According to the directive, shipping companies must surrender their initial allowances by 30 September 2025 for emissions reported in 2024. To ensure accountability for emissions, the EU ETS directive introduces a phased approach to emission allowance coverage.

In 2025, shipping companies must cover 40% of their emissions reported for 2024 with emission allowances, and this threshold increases to 70% for emissions reported in 2025 in 2026. Starting from 2027 and onwards, companies must cover 100% of their reported emissions.

FEPORT President, Gunther Bonz, emphasized the need for an immediate study on the impact of the ETS on EU ports to avoid the risk of terminals becoming less competitive.

“We need a real study regarding the impact of ETS for shipping on EU ports to be conducted now and not in two years’ time when cargo will have left some EU ports for good,” Bonz said.

“Ports have not been on the radar of the EU Commission when EU ETS for shipping was discussed, and the real risks of cargo diversion have not been really assessed. So, we are now in a situation where our terminals can become less competitive and attractive for shipping lines which do not intend to pass on the additional ETS costs to their customers and call-in non-EU ports.”

The association aims to engage in a constructive dialogue with the EU Commission to find solutions and welcomed the Port of Lübeck as a new member during the meeting.

“This was not EU policy makers’ aim but it is the result. The clock is ticking for EU ports. This is why we are calling the EU Commission to start immediately a study and to also perform a continuous assessment in real-time of the impact of EU ETS for Shipping now. The terms of reference of the study should consider all solutions that are currently proposed by different port stakeholders to avoid cargo diversion. It is important that we all do our utmost efforts to avoid a detrimental effect on employment in EU ports,” Bonz concluded.

FEPORT sees this expansion as an opportunity to raise awareness about the vital role of terminal operators in EU port investment and modernization, particularly in the face of intense international competition and significant economic and environmental challenges.

As the EU prepares to implement the EU ETS directive for the maritime sector, the European Sea Ports Organisation (ESPO) has also raised concerns about the potential for carbon and business leakage due to the current legislation’s limited scope.

As a result, the European Commission has included Tanger Med and Port Said, two pivotal transshipment hubs, in the European Union’s (EU) revamped carbon pricing regime for ships.

This latest update, however, brings a marked change in the way emissions are assessed, and it extends its reach beyond EU borders, heralding extra-territorial implications.

The move is being pursued as the EU aims to reduce the risk of evasive port calls by containerships to ports outside of the union and relocation of container transshipment activities to ports outside of the union.

While only a few neighbouring ports meet the high transshipment volume thresholds set by the legislation (65%), many ports and terminals across Europe have already developed or are expanding their transshipment capabilities. ESPO urged the European Commission to consider not only current volumes but also transshipment capacity in the various ports bordering the EU.

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Meanwhile, shipping companies are announcing ETS surcharges in preparation for the regulation.