Ships cannot use Port Said and Tanger Med to evade carbon tax - EU

The European Commission (EC) has included the “neighbouring container transhipment ports” of East Port Said and Tanger Med in its Emissions Trading System (ETS) to “reduce the risk of evasive port calls”.

PHOTO: Container vessel docked at the East Port Said port in the Suez Canal. SCZONE

The EU ETS regulation for shipping is part of the EU's broader Fit for 55 package, under which responsible shipping companies will be liable for their fleets' CO2 emissions from 1 January 2024.

The regulation will apply to cargo and passenger ships exceeding 5,000 gross tonnes. The ETS will be phased in over three years, starting with 40% of CO2 emissions covered in 2024, 70% in 2025 and 100% from 2026.

Shipping's inclusion in the ETS has been known for a while, but there have been concerns about carbon leakage. A major loophole was identified in which ships could avoid paying for the CO2 emissions of long voyages from non-EU to an EU ports through transshipments at non-EU ports near their EU ports of call.

The EC has now mandated that all EU member states should include Egypt's East Port Said and Morocco's Tanger Med port, which it has identified as neighbouring container transhipment ports. According to the EC, the move will minimise the risk of carbon leakage and "evasive port calls".

For a port to be identified as a neighbouring container transhipment port, it needs to meet several criteria:

• the port’s share of transhipment of containers must exceed 65% of its total container traffic in the past year
• it is in a non-EU country outside the EU, but less than 300 nautical miles from any EU port

East Port Said and Tanger Med meet all of these requirements. Moreover, neither of these ports have any measures equivalent to the EU ETS, so ships docking at these ports will only have the EU ETS to comply with.  

Besides these two ports, the Port Authority of Valencia (PAV) predicts that Tekirdag Asyaport in Turkey can also be used as a transhipment container port since it also meets all these requirements.

PAV also forecasts that the Turkish ports of Ambarli, Aliaga and Mersin, the Israeli ports of Ashdod and Haifa, and Lebanese Port of Beirut could serve as potential transhipment container ports. And it has urged the EU to monitor container traffic growth at ports such as Damietta II in Egypt, Nador West Med in Morocco and Cherchell in Algeria.

“We understand that the EU must pay due attention to the evolution of other ports located in the Mediterranean area, as they have installed operational capacity that makes them potential enclaves to which important volumes of transhipment could be diverted,” PAV said.

By Konica Bhatt

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