Web Alert: EU Parliament backs proposal to include shipping in CO2 reforms

The European Parliament has voted in favour of proposed reforms to including international shipping in the EU Emissions Trading System (ETS) from 2023.

The ETS sets a cap on the total amount of greenhouse gases that can be emitted, which is reduced over time to lower total emissions. Within the cap, companies can then trade ‘emission allowances’ with one another. If at the end of each year, a company cannot surrender enough allowances to cover its emissions, heavy fines are imposed.

Whilst the vote brings the ETS one step closer to reforms, the proposals will require the support of a majority of EU member states in the EU Council to pass into law.