Is the ETS earmarking debate a smokescreen for the level playing field?

Referring to a report from the Commission to the European Parliament and the Council on energy subsidies in the EU, the European Union still provided approximately €97 billion in fossil-fuel subsidies in 2024.

Renewable-energy subsidies amounted to €76 billion.

And while Europe has committed itself to climate neutrality, approximately €50 billion of those fossil-fuel subsidies had either no planned end date or an end date beyond 2030.

These numbers should make us question where the current maritime ETS debate is taking us.

Shipping is now part of the EU ETS. An important debate has consequently emerged about whether 50%, 70%, 80% or 100% of the revenues generated by maritime emissions should be earmarked for maritime decarbonisation.

100% should be the minimum.

But we should be careful not to mistake the redistribution of ETS revenues for the scale of maritime and port decarbonisation policy Europe actually needs.

Renewables and maritime decarbonisation belong on the same side of that equation:

Europe needs considerably more renewable electricity. Ports and shipping, in turn, need those renewable electrons to decarbonise. Shore power, vessel charging, terminal electrification, batteries, port energy systems and renewable fuels will all depend upon increasing quantities of competitively priced renewable electricity (cfr. EOPSA’s Age of OPS).

As renewable generation increases, Europe also needs new flexible electricity demand and electrified ports can provide precisely that: vessels connecting intermittently to shore power, batteries managing large vessels peak demand, workboats charging, terminal equipment electrifying and port energy hubs coordinating generation, storage and consumption. All at competitive electricity prices.

At times of renewable surplus, these new loads can provide additional markets for renewable electricity and potentially contribute to reducing curtailment and exposure to negative electricity prices.

Renewables need new markets and maritime needs competitively priced renewable electrons, so why are they not on a level playing field ? (cfr. EOPSA’s Utility Trap)

In 2024 alone, total EU energy subsidies amounted to €340 billion. Electricity received €166 billion in subsidies, making it the most heavily subsidised energy carrier. Renewable energy received €76 billion.

Europe did not build its renewable-energy transition through subsidies alone. It progressively created an investment framework designed to make projects investable and bankable: feed-in tariffs and premiums, competitive auctions, Contracts for Difference (CfDs), long-term Power Purchase Agreements (PPAs), direct investment support, public guarantees and other de-risking mechanisms. These instruments provided greater revenue visibility, reduced investment risk and financing costs, and helped mobilise private capital. The Commission itself describes CfDs as providing revenue certainty that can reduce investment costs and continues to promote PPAs, guarantees and targeted de-risking as tools for mobilising private investment.

And that support did considerably more than deploy renewable capacity. It helped create industries around the transition: skilled jobs, new supply chains, education and training, innovation, technological capability and businesses that could ultimately stand on commercially viable foundations.

Public intervention helped create lasting economic and industrial value. The Commission's current clean-energy investment strategy continues that logic: public finance should act as a catalyst to de-risk projects, reduce financing costs and attract private capital rather than replace it.

Europe therefore already accepts the fundamental proposition that markets alone will not necessarily deliver strategic transformation at the speed required. Well-designed public intervention can create the conditions in which new technologies and industries become investable, scalable and ultimately commercially sustainable.

And this is where ports and shipping should enter a much larger European conversation rather than stay stuck at ETS.

If CfDs, feed-in, guarantees and other de-risking mechanisms helped make renewable generation bankable, we should now be asking what equivalent mechanisms could make OPS, vessel charging and port electrification fully bankable.

Every additional renewable electron used by a ship instead of producing electricity onboard from fossil fuel is part of the energy transition. Every battery capable of absorbing renewable electricity, every electrified berth, every charging station for workboats and every port energy hub capable of matching renewable supply with maritime demand expands the market for Europe's renewable-energy system.

These investments should therefore not be viewed simply as transport infrastructure. They are increasingly part of Europe's energy infrastructure.

If Europe continues spending tens of billions subsidising fossil fuels while simultaneously debating whether maritime should receive 50% rather than 100% of the ETS revenues it generates, we risk debating how to allocate a “small” pot of money while avoiding the much larger question of how Europe's public support should be aligned with our decarbonisation objectives.

The Commission itself acknowledges the problem. It reports that €89 billion of environmentally harmful energy subsidies in 2024 were attributable to fossil fuels, and reiterates that reducing and ultimately eliminating fossil-fuel subsidies remains a Commission priority.

So let us earmark maritime ETS revenues (all of them) but let us not pretend that this constitutes a European maritime decarbonisation strategy.

The greater opportunity is to accelerate the movement of public support from yesterday's energy system towards tomorrow's: more renewable generation, more grids and intelligent grids, more storage, more electrification, more clean maritime infrastructure, more investment de-risking and more demand capable of consuming renewable electricity.

This is not renewables versus shipping. It is renewables, policymakers and maritime logistics coming together to fight climate change, strengthen Europe’s energy transition and preserve the quality of life of our citizens and our children.

Let’s get connected.


Roland Teixeira de Mattos
President & General Secretary
European Onshore Power Supply Association asbl/vzw.
Brussels.


References:
https://eur-lex.europa.eu/resource.html?uri=cellar:3b60ee74-b297-11f1-b9e5-01aa75ed71a1.0019.02/DOC_1&format=PDF
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52026DC0472
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52026DC0112
EOPSA’s Age of OPS
EOPSA’s Utility Trap