Europe's Maritime Carbon Market Faces Its Integrity Test
Transport & Environment's latest briefing argues that the EU should strengthen the maritime ETS with targeted safeguards against evasive port calls, bring smaller vessels into scope through simplified reporting and use revenues to accelerate the sector's transition. For DTF, the point is urgent: carbon pricing only works if its revenues help build the cleaner port and vessel systems it demands.
Europe's maritime carbon market is entering its most delicate political moment. It has to prove two things at once: that it can price shipping emissions credibly, and that it can do so without weakening the competitiveness of European ports.
Transport & Environment's briefing, No room for evasion: strengthening the maritime ETS to protect climate and competitiveness, lands directly in that debate. Its argument is not that the maritime ETS is failing. It is more precise. The first year of implementation has not shown clear, structural evidence of ships making systematic evasive port calls to avoid ETS costs. But incentives can emerge as the system reaches full phase-in, and the EU should close the obvious gaps before they become business models.
The concern is straightforward. A vessel can reduce its ETS exposure by inserting an additional call at a neighbouring non-EU port, thereby shortening the part of the voyage that is counted under EU rules. The current framework already tries to address that risk by treating certain non-EU transhipment hubs as non-port calls for ETS purposes. Today, only Tanger Med in Morocco and Port Said in Egypt are listed under that mechanism.
T&E argues that the list should be expanded by lowering the transhipment activity threshold from 65 per cent to 40 per cent. According to its briefing, that targeted change would add five ports and cover more than 90 per cent of transhipment activity in neighbouring regions. The purpose is not to punish neighbouring ports. It is to remove the incentive for artificial routing changes that undermine both climate policy and fair competition.
This is an important distinction. European ports, especially in the Mediterranean, have legitimate concerns about competitiveness. But weakening the ETS through broad exemptions would not solve those concerns. It would simply reduce the value of a policy that is meant to drive investment into cleaner ships, shore-side electricity, alternative fuels, battery systems and port energy infrastructure.
The stronger answer is targeted reform. T&E's proposal keeps the existing framework intact while closing the routes through which carbon costs could leak away. It also introduces the idea of an "ETS-as-a-service" clause, under which a share of revenues generated from voyages involving neighbouring non-EU ports would be redistributed to those countries. This would give neighbouring states a reason to cooperate with the system rather than compete against it from the outside.
That is where policy begins to look more practical. Carbon markets can become politically brittle when they are seen only as cost machines. They become more durable when revenues are tied to transition, cooperation and investment. For maritime, that means using ETS income to support e-fuels where they are genuinely needed, battery-electric ships where routes allow, shore-side electricity, port grid upgrades, storage and vessel connection readiness.
The numbers are large enough to matter. T&E estimates that including smaller ships between 400 and 5,000 gross tonnes could expand ETS coverage by up to 16 per cent. It says this could generate between EUR 910 million and EUR 1.1 billion in 2026, rising to around EUR 1.7 billion annually between 2028 and 2035. The LinkedIn comment shared by the user also points to the wider maritime ETS as a substantial revenue engine, with potential cumulative revenues of up to EUR 51.8 billion between 2026 and 2030.
The revenue map attached to the discussion illustrates the political weight of the issue. T&E's 2025 analysis, assuming full phase-in and an ETS price of EUR 85 per tonne of CO2 equivalent, shows potential shipping ETS revenues flowing to Member States and the Innovation Fund. Germany is shown at EUR 870 million, Poland at EUR 643 million, Italy at EUR 410 million, Spain at EUR 371 million, Greece at EUR 340 million and the Innovation Fund at EUR 289 million. Malta is shown at EUR 52 million.
These are not abstract figures. For maritime decarbonisation, they are potential project pipelines. If revenues disappear into general budgets, the ETS will remain a compliance cost. If they are visibly reinvested into shore power, green corridors, port electrification, battery systems, cleaner fuels and vessel upgrades, the ETS becomes an industrial transition instrument.
T&E also proposes bringing smaller ships into the ETS with lighter reporting. Its briefing says at least 7,326 vessels between 400 and 5,000 gross tonnes fall outside the current system and emit almost 15 million tonnes of CO2 per year. Rather than forcing every smaller operator into full large-vessel reporting, T&E suggests splitting coverage between ETS 1 and ETS 2 based on operating patterns, with simplified monitoring focused on annual fuel consumption and CO2 emissions.
That matters for DTF because smaller vessels are often the vessels closest to port communities: ferries, general cargo ships, ro-ro vessels, tankers and other short-sea operators. Their emissions are not always dramatic in a global fleet chart, but they are very real in coastal air, port-city noise and local climate accounting. A proportional ETS pathway could create both the pressure and the revenue to help these operators electrify where it makes sense.
The Mediterranean dimension is particularly sensitive. T&E's regional analysis found no clear evidence of additional evasive stops in the Western Mediterranean ports it reviewed, including Malta Freeport, Barcelona, Valencia, Algeciras, Gioia Tauro and Cagliari. In the Eastern Mediterranean, it found more ambiguous signals, but also recognised that Red Sea disruption is a credible alternative explanation for changed routing patterns.
That nuance is important. The policy debate should not be driven by panic. It should be driven by evidence. If systematic evasion is not yet visible, Europe has time to fix the incentive structure calmly and narrowly. If it waits until evasion becomes embedded, the politics will become harder and the cost of repair will rise.
For ports, the immediate message is not that the ETS should be feared. It is that ETS revenues and safeguards should be tied to a credible competitiveness package. A port facing grid constraints needs support for grid reinforcement. A ferry operator facing battery transition costs needs infrastructure and financing. A container terminal preparing for shore-side electricity needs vessel readiness and berth planning. A shipping line looking at e-fuels needs price support that actually closes the gap.
The future of maritime decarbonisation will not be decided by a single regulation. It will be decided by how the ETS, FuelEU Maritime, AFIR, CEF funding and national port strategies are aligned. The sector needs carbon pricing, but it also needs reinvestment pathways that make compliance productive.
The political risk is obvious. Competitiveness concerns are real, and ports that feel exposed to neighbouring non-EU competition will keep pushing for relief. But relief that hollows out the ETS would be the wrong medicine. It would reduce revenues, weaken the investment signal and delay the infrastructure that European ports need to compete in a lower-carbon maritime economy.
A better bargain is available. Close narrow loopholes. Share revenue where cooperation is needed. Bring smaller vessels in with lighter rules. Ringfence a meaningful share of maritime ETS revenues for the technologies and infrastructure that reduce emissions at sea and at berth.
That is the line Europe should hold. Climate integrity and port competitiveness do not have to be opposites. If the money is reinvested wisely, they can become the same project.
