EU’s carbon price on shipping threatens economic growth, southern nations say

The European Union’s looming rules to put a carbon price on shipping emissions threaten economic growth by benefiting ports outside the region, according to six member states.

The countries — mainly along the bloc’s Mediterranean coastline — are worried that shipping companies will be able to dodge paying the price by docking at ports close to, but outside of, the EU. Italy called for the European Commission, the bloc’s regulatory arm, to look at possible solutions, such as financial compensation.

“We have to put corrective measures in place,” said Gilberto Fratin, Italy’s minister for the ecological transition. “It has major negative consequences for the competitiveness of EU industry.” 

Under a deal struck last year, shipping will be phased into the EU’s carbon market from Jan. 1, starting with 40% of emissions for 2024 being covered. A full 100% of emissions will be covered from 2027. Wopke Hoekstra, the EU’s climate commissioner, said it would monitor the effects on competitiveness.

The bloc has already said Egypt’s East Port Said and Morocco’s Tanger Med should be identified as “neighboring container transshipment ports” to prevent evasion of the EU’s carbon market rules. Italy’s Fratin said there should be stricter rules so that more ports are included. 

Portugal, Malta, Greece, Cyprus and Belgium all expressed similar concerns at a meeting of environment ministers in Luxembourg Monday. 

“We are ready to work with the commission and the member states to ensure this situation is monitored closely, pre-empting negative repercussions from the outset,” said Miriam Dalli, Malta’s minister of environment, energy and enterprise. We have to prevent our economies from suffering “irreversible effects,” she added.