Connect with us

Business

€24bn in fossil fuel subsidies ‘a perverse incentive’ for shipping pollution

‘No ethical or environmental grounds for treating the shipping industry more leniently than road transport.’
Admin

Published

7 years ago

on

5d9425bacce4b 1569990074

Europe's leading clean transport campaign group Transport & Environment (T&E) on Tuesday (1 October) published a paper which estimates the EU giving more than EURO 24 billion per year in subsidies to maritime sector in the form of fossil fuel tax exemptions under the European Energy Tax Directive (ETD) and national tax legislation.

T&E believes there are no ethical or environmental grounds to treat the maritime industry more leniently in European environmental regulation. In the context of the continent’s climate objectives, this is not only an anachronism but also a perverse incentive for climate pollution.

The organisation’s full statement on the development is as follows:

One of the most polluting forms of transport is benefiting from what is effectively a fossil fuel subsidy of €24 billion a year, according to a new report by T&E. Shipping, which still runs largely on dirty heavy fuel oil, is outright exempt from energy taxes under the EU’s Energy Tax Directive (ETD). T&E described it as ‘a perverse incentive for climate pollution’ and recommended including shipping in the EU emissions trading system (ETS) to end this historical anachronism.

Shipping has not only survived, but also boomed in an era of aviation and high-speed rail largely because of the enormous cost savings it offers companies which transport consumer products and heavy goods. This is largely due to cheap and untaxed maritime fuel and a total lack of climate regulation in the sector. Shipping fuel – heavy fuel oil – is not only the cheapest fuel on the planet, but also the dirtiest one. It emits large quantities of sulphur and other pollutants, as well as greenhouse gases. As a result, shipping is now recognised as one of the dirtiest means of freight transport.

By signing the Paris agreement, the EU committed to ‘economy wide’ decarbonisation efforts; as the only sector that is not yet subject to mandatory CO2 reduction measures in Europe, international shipping stands in the way of the EU fulfilling its Paris commitment. Due to this and the dysfunctionality of the International Maritime Organisation (IMO) in regulating the sector, sea-borne transport is likely to become a big issue for the 2019-2024 term of the European Commission. And with the nominees for the new Commission due to have their hearings over the next couple of weeks, T&E is attempting to force maritime transport’s environmental performance up the EU agenda.

Its study on fossil fuel tax breaks for international shipping in the EU highlights the subsidies ship owners enjoy via tax exemptions. Article 14 of the ETD bans taxation of maritime fuel when sold to ships on EU territory. So, while a tonne of CO2 from a ship makes the same contribution to global warming as a tonne of CO2 from a diesel trucks, the diesel owner pays energy tax while the ship owner avoids it.

Based on marine fuel deliveries and national diesel tax rates in the EU’s 28 member states, T&E has calculated the total unpaid energy tax under the ETD shipping exemption as €24 billion. The biggest beneficiary is the Netherlands with just over €6 billion in lost tax from its approximately 12 million tonnes of maritime fuel sales, followed by Belgium with €4.5 billion Not surprisingly, landlocked countries and those with short coastlines come further down the list.

The obvious way to combat these invisible subsidies would be to remove the Article 14 exemption from the ETD, but this would need unanimity among all 28 member states. Also, even if the ban was lifted, it would still be up to individual member states whether tax the marine fuel or not. T&E therefore recommends shipping be included in the EU ETS, which would be easier to achieve as it would only require a majority vote.

T&E’s shipping manager, Faig Abbasov, said: ‘There are no ethical or environmental grounds for treating the shipping industry more leniently than road transport. We believe the right way of removing current subsidies is through emissions trading, and we note that the incoming Commission president Ursula von der Leyen has committed to deliver this. Including shipping in the ETS would generate some €3.6 billion a year with the current ETS CO2 price of €26 per allowance, and a CO2 multiplier could boost revenues still further. Given the EU’s climate commitments, the current situation is not only an anachronism but also a perverse incentive for climate pollution.’

T&E’s study also looks at the likely impact of including shipping in the ETS on the cost of some consumer goods typically transported by sea – bananas, iPads, a kilogram of grain. Even with a €50/tonne charge for CO2 which is passed on to the consumer, the impact on final prices would be less than €0.01 per item.

The EU’s shipping sector is responsible for around 140 million tonnes of CO2 emissions a year, larger than the total national emissions of the bottom 20 EU member states (individually). This figure is expected to grow in coming years.

Source: Transport & Environment 
Published: 2 October, 2019
 

Related Topics:
Continue Reading

Mass Flowmeter

Hong Kong backs MFM adoption with voluntary scheme to boost bunkering competitiveness

Hong Kong’s Marine Department launched the Quality Bunker Operator Scheme to encourage bunker operators to install and use mass flow meter systems on their bunker vessels.
Admin

Published

1 hour ago

on

June 4, 2026

By

RESIZED EH dual mfm setup

Hong Kong’s Marine Department (MD) on Wednesday (3 June) launched the Quality Bunker Operator Scheme to encourage bunker operators to install and use mass flow meter systems (MFM systems) on their bunker vessels.

MD said the scheme aims to enhance Hong Kong’s bunkering service quality and the competitiveness of Hong Kong ports, thereby further consolidating Hong Kong’s position as an international maritime centre and a major bunkering port.

Under the Scheme, bunker operators of traditional maritime fuel and biodiesel that install and use MFM systems on their bunker vessels, with the MFM systems inspected and certified by an accredited body in accordance with the International Organization for Standardization’s ISO 22192 Standard or equivalent requirements, can apply to the MD for inclusion in the scheme’s “List of Quality Bunker Vessels”, provided they meet the relevant technical and operational requirements. 

Details of the bunker vessels successfully included in the List will be published on a dedicated page on the MD’s website for reference by shipping companies and relevant stakeholders.

Participation in the Scheme is voluntary. In addition to receiving recognition from the MD, participating bunker operators will benefit from enhanced corporate image and competitiveness through the adoption of MFM systems, thereby boosting customers’ confidence and helping to create new business opportunities.

 A spokesman for the MD, said: “As an international maritime centre supported by our country, Hong Kong has a strategic location adjacent to major international fairways. Coupled with years of development in marine fuel bunkering, Hong Kong possesses rich experience and talent in the field. For many years, Hong Kong has consistently ranked as the seventh-largest bunkering port globally, the second-largest in our country, and the largest in the Greater Bay Area, providing reliable and competitive fuel bunkering services to ocean-going vessels from around the world. 

“As the international shipping industry has an increasing demand for accuracy and transparency in bunkering services, service quality and measurement precision in bunkering operations have become important indicators of a bunkering port’s competitiveness. The Scheme will enhance bunkering accuracy and transparency, further enhancing the quality of Hong Kong’s bunkering services.

The spokesman added that comprehensive port services are one of Hong Kong’s key advantages as an international maritime centre.

“We will also mandate the use of MFM systems on all methanol bunker vessels this year to ensure that Hong Kong continues to provide high-quality bunkering services in the era of green maritime fuels.” 

Note: The application form for the Scheme can be found on the MD’s website. Interested bunker operators can download the application form from the website or contact the MD’s Green Maritime Fuel Team via email ([email protected]) for details.

 

Photo credit: Manifold Times
Published: 4 June, 2026

Continue Reading

Alternative Fuels

MPA and MSC ink MoU to support adoption of alternative bunker fuels

MPA and MSC will explore new routes and services to strengthen connectivity, support the adoption of alternative marine fuels such as bio-LNG, and advance technologies to improve vessel energy efficiency.
Admin

Published

1 hour ago

on

June 4, 2026

By

MPA and MSC ink MoU to support adoption of alternative bunker fuels

The Maritime and Port Authority of Singapore (MPA) on Wednesday (3 June) said it signed a Memorandum of Understanding (MoU) with MSC Mediterranean Shipping Company to strengthen collaboration in maritime decarbonisation, digitalisation, innovation, and manpower development. 

The MoU was signed on 25 May 2026 by Mr Ang Wee Keong, Chief Executive of MPA, and Mr Soren Toft, Chief Executive Officer of MSC.

The MoU underscores the shared commitment of MPA and MSC to foster a sustainable, digital, and future-ready maritime sector, while enhancing MSC’s operational and business activities in Singapore. This year also marks the 30th anniversary of MSC establishing its Asia Regional Office and local office in Singapore.

Under the MoU, MPA and MSC will explore new routes and services to strengthen connectivity, support the adoption of alternative marine fuels such as bio-LNG, and advance technologies to improve vessel energy efficiency and operational performance.

MPA and MSC will also collaborate on maritime digitalisation initiatives to improve operational efficiency, including streamlining vessel arrivals and port operations. 

On manpower development, MSC will support internship and scholarship opportunities through Singapore Maritime Foundation’s Maritime Outreach Network (MaritimeONE) platform, an industry-led tripartite partnership comprising industry, government and institutes of higher learning that aims to raise awareness of the maritime industry and attract quality talent into the maritime sector.

Mr Ang Wee Keong, Chief Executive of MPA, said: “This partnership reflects the strong collaboration between MPA and MSC in driving sustainability and digitalisation in the maritime sector. By working together on decarbonisation, operational efficiency and talent development, we aim to strengthen Maritime Singapore’s position as a trusted and future-ready global maritime hub.”

Mr Soren Toft, Chief Executive Officer of MSC, said: “Singapore is a strategically important hub for MSC and a key gateway to the broader Asia region. As we mark 30 years in Singapore, this MOU reinforces our long-term commitment to strengthening our presence here. MSC and Singapore are closely aligned on the priorities shaping the future of global shipping, and we look forward to deepening this partnership to drive the continued growth and resilience of the maritime industry.”

 

Photo credit: Maritime and Port Authority of Singapore
Published: 4 June, 2026

Continue Reading

Emissions reporting

StormGeo and OceanScore link emissions data, compliance workflows

Cooperation combines StormGeo’s expertise in operational vessel and emissions data with OceanScore’s expertise in emissions compliance workflows across EU ETS, FuelEU Maritime and UK ETS requirements.
Admin

Published

1 hour ago

on

June 4, 2026

By

StormGeo and OceanScore link emissions data, compliance workflows

Weather intelligence and decision support solutions provider StormGeo and Hamburg-based technology platform OceanScore on Wednesday (3 June) said they have deepened their ongoing cooperation through the signing of a collaboration agreement during Posidonia 2026 in Athens on 2 June.

The cooperation combines StormGeo’s expertise in operational vessel and emissions data with OceanScore’s expertise in emissions compliance workflows across EU ETS, FuelEU Maritime and upcoming UK ETS requirements.

Together, the companies aim to help shipping companies seamlessly navigate increasing regulatory complexity more efficiently — from emissions reporting and data validation to compliance exposure management, pooling and financial settlement.

As emissions regulation becomes an increasingly important part of commercial shipping operations, the need for reliable operational data and streamlined compliance processes continues to grow. The cooperation between StormGeo and OceanScore is designed to support shipping companies with more connected, transparent and actionable processes across operational and commercial teams.

“From the outside, companies like StormGeo and OceanScore may sometimes be perceived as competitors because both operate around emissions and compliance workflows,” said Albrecht Grell, Managing Director at OceanScore. 

“But in reality, the industry increasingly needs both perspectives working together: trusted operational emissions data on one side and commercial compliance execution on the other. Our cooperation reflects that shipping companies are no longer looking for isolated solutions — they need connected processes, automated across different systems and reliable decision-making throughout the full compliance chain.”

By connecting validated operational emissions data with commercial compliance management, the cooperation supports workflows across:

  • emissions reporting and validation 
  • compliance management across EU ETS, FuelEU Maritime and upcoming UK ETS requirements
  • exposure visibility and cost transparency
  • pooling, settlement and financial processes 

The cooperation also aims to improve commercial transparency and coordination across operational and commercial stakeholders.

“StormGeo plays a central role in helping shipping companies turn operational vessel and emissions data into trusted, decision-ready insights,” said Espen Martinsen, Chief Commercial Officer at StormGeo. 

“As emissions regulations become more complex, this data is essential for transparent and efficient compliance management. By working with OceanScore, we can help customers connect StormGeo’s validated operational data with commercial compliance processes, creating a more integrated and practical approach to emissions management.”

The signing ceremony took place at the StormGeo booth during Posidonia 2026 in Athens and was attended by representatives from both companies.

Both companies expect the cooperation to continue evolving alongside upcoming regulatory developments, including FuelEU Maritime, EU ETS, the upcoming UK ETS and future emissions-related frameworks affecting global shipping.

 

Photo credit: StormGeo
Published: 4 June, 2026

Continue Reading

Trending