Discussions on harmonizing the EU ETS with the new IMO global climate framework

source: WSC

European maritime policy is at a critical juncture, as the debate on the harmonisation of the European Emissions Trading System (EU ETS) with the new global climate framework of the IMO reaches its peak. The establishment of a single emissions pricing system through the IMO Net Zero is expected to prevent distortions in competition and protect the European port and supply chain, maritime bodies report, while at the same time in the E.U. .

The debate on the future of the European ETS in shipping is rekindling, as its review for the period after 2026 approaches. The World Shipping Council and the European Shipowners' Association (ECSA) have called for a coordinated approach with the IMO, while environmental organizations, such as T&E, have warned that weakening the ETS will undermine the European Union's targets for shipping emissions.

Call for alignment

The World Shipping Council (WSC) has issued a position paper calling for a strategic alignment of the EU Emissions Trading System (EU ETS) for shipping with the upcoming NetZero Framework of the International Maritime Organization (IMO). The recommendation comes ahead of the crucial meeting of the IMO Marine Environment Protection Committee in October 2025, where the new international climate framework for shipping is expected to be adopted with full implementation from 2028.

The WSC underlines that aligning the EU ETS with the IMO’s global emissions pricing will enhance the effectiveness of climate action, while avoiding the “double burden” of overlapping regulatory systems. As noted, the integration of the two frameworks can reduce bureaucracy, maintain the competitiveness of European shipping companies and strengthen the coherence of international efforts to eliminate emissions. At the same time, the debate in Brussels on the revision of the Emissions Trading System (EU ETS) in shipping is intense, following the completion of the Commission’s three-month public consultation and in anticipation of the adoption by the IMO of the new global framework for net zero next October.

ECSA, representing European shipowners, called for the full harmonisation of the Emissions Trading System (EU ETS) and FuelEU Maritime with the IMO framework, arguing that maintaining duplicate regulations would lead to excessive burden and risks of double taxation. ECSA Secretary General Sotiris Raptis, speaking to Lloyd's List, said that the IMO mechanisms are, in the Union's assessment, more environmentally ambitious than the European rules. In contrast, environmental NGO Transport & Environment (T&E) said that the IMO system, if implemented alone, would leave around 85% of European shipping emissions unaccounted for, while adding that the European Commission should also consider phasing out the exemption for certain ship routes between small EU islands and the mainland by 2028, arguing that clean alternatives already exist for these routes.

He also called for the funds from the ETS emissions trading system to be reinvested to help bridge the price gap between green and fossil fuels. He also stressed that there is currently no solid and consistent evidence for avoiding the ETS, but the EU could consider new safeguards to discourage shipowners from doing so. He finally noted that on the routes that are most at risk, the EU could apply a carbon price from the origin to the destination, rather than based on the first and last legs of the ships' voyages.

What is NetZero?

The IMO Net Zero Framework provides for a single global pricing mechanism for greenhouse gas emissions and targets for reducing the carbon intensity of marine fuels (Greenhouse Gas Fuel Intensity – GFI). The system will include a GHG emission trading registry, enabling ships to comply through trading within the industry. GHG emission trading in shipping refers to an emissions trading mechanism, whereby shipowners or ship operators can buy or sell greenhouse gas emission allowances – in other words, “carbon credits” – under a market system such as the EU Emissions Trading Scheme (ETS) or the upcoming IMO GHG Fuel Intensity Registry.

source: naftemporiki