German Shipowners Seek Clarity from Berlin on Carbon Trading

German shipowners' group VDR on Tuesday urged the Berlin government to provide legislation implementing European Union requirements to include the sector in the bloc's carbon trading system.

The government is behind in transforming an EU agreement late in 2022 to require shipowners to buy EU carbon permits to trigger investment in greener technologies, into national legislation, VDR said at its annual press conference.

"For us, the cornerstone of our operations is not only planning certainty but also the assurance of uniform competitive conditions on an international scale," said managing director Martin Kroeger, pointing out there is not yet a draft bill to work with.

The EU wants vessels to pay for 40% of their emissions from this year, rising to 70% in 2025 and 100% in 2026, said the EU law, which was rubber-stamped in 2023.

It brings shipping in line with factories and power plants that have long been in the scheme, forcing them to find ways to emit less.

VDR believed emissions pricing has to be done consistently across the globe and not in a fragmented approach, said Kroeger. "...we don't want to pay twice for the same emissions," he said.

Shipping accounts for nearly 3% of the world's CO2 emissions but is tricky to decarbonise, with commercially viable technologies only just beginning to emerge.

Efforts at the International Maritime Organisation (IMO) to streamline global efforts to reach net zero emissions by 2050 are opposed by countries including China.

Germany's merchant fleet consists of 1,800 ships with 47 million gross tons, making it the world's seventh largest shipping nation. Germany is the biggest operator of container ships with 29 million tons.

Commenting on geopolitics, VDR said current diversions to avoid the Red Sea cost operators $1 million per tour while the Black Sea situation has eased for German ships.

(Reuters - Reporting by Elke Ahlswede, writing by Vera Eckert in Frankfurt, editing by Rachel More and Ed Osmond)