EU Carbon Market to Expand to Shipping, Housing and Transport

(Bloomberg) -- The European Commission plans to include maritime transport in the world’s biggest carbon market and create an adjacent emissions-trading program for heating and road transport.

The EU executive arm is currently designing the biggest reform of the Emissions Trading System to date in order to align it with a stricter climate targets for 2030. The commission wants to introduce a phase-in period for shipping companies in the the trading system between 2023 and 2025, requiring full compliance with pollution caps as of 2026, according to a draft law seen by Bloomberg News.

“The extension of the EU ETS to maritime transport applies in respect of emissions from incoming voyages and emissions occurring at berth in an EU port,” it said in the document, which is to be published on July 14.

The new emissions trading program for buildings and road transport would be established from 2025. The Commission has a policy of not commenting on draft legislation. The proposal may still change before adoption.

“During the first year, the regulated entities will be required to hold a greenhouse gas emissions permit and to report their emissions for years 2024 and 2025,” according to the draft proposal. “The issuance of allowances and compliance obligations for these entities will be applicable only from 2026, which will allow the new system to start functioning in an orderly and efficient manner.”

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