EU shipowners demand €30bn to bridge green fuel gap as ETS burden bites
European shipowners urge EU to triple carbon allowances to €30bn to offset soaring compliance costs under ETS.
European shipowners are urging the EU to triple the carbon allowances allocated to support the maritime sector’s transition to cleaner energy. The European Community Shipowners’ Associations (ECSA) argues that shipping contributes nearly double its share of emissions to the EU Emissions Trading System (ETS) revenues, justifying a €30 billion ($33.6 billion) funding package.
The call targets the Sustainable Maritime Alternative Propulsion (SMAP) mechanism, which currently earmarks 110 million allowances for the sector. ECSA’s study estimates that at least 330 million allowances are needed to bridge the cost gap between conventional marine fuels and sustainable alternatives. The proposal is part of the ongoing revision of the EU ETS and requires approval from the European Parliament and Council.
Disproportionate financial burden on shipping: eu carbon allowances
Maritime transport accounts for roughly 10% of emissions covered by the EU ETS but purchases nearly 20% of the allowances auctioned. Unlike other industries, shipping has received no free allowances since joining the system in 2024. From 2026 onward, companies must surrender allowances covering 100% of their emissions under the ETS framework.
ECSA estimates that shipowners currently buy around 90 million allowances annually. At a carbon price of €100 per allowance, this would translate to an annual cost of approximately €9 billion ($10.1 billion), though this figure is illustrative rather than fixed.
Expanding support for cleaner technologies
The SMAP mechanism aims to offset the higher costs of lower-emission fuels and propulsion systems by allocating allowances to eligible companies. However, ECSA warns that the current proposal would cover only about one-third of the industry’s needs between 2028 and 2040.
The association also advocates for broadening the scope of support to include energy-efficiency investments, not just alternative fuels and propulsion systems. ECSA Secretary General Sotiris Raptis emphasized that lawmakers must expand the reserve to provide certainty for investments in cleaner shipping technologies, stating that the current proposal fails to match the scale of the challenge.
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