Evaluating the effectiveness of the EU ETS in reducing greenhouse gas emissions in the shipping sector

The European Union Emissions Trading System (EU ETS) is designed to reduce greenhouse gas (GHG) emissions by setting a cap on the total emissions allowed from included sectors and allowing companies to buy and sell emission allowances, to meet their compliance obligations. Expanding the EU ETS to cover the maritime shipping sector, already in use from start of 2024, could be an effective tool for reducing GHG emissions in maritime transport. The EU ETS can be an effective mechanism for reducing GHG emissions in the maritime shipping sector, especially when combined with other decarbonization strategies such as technology investment, fuel innovation, and regulatory frameworks. However, its success will depend on global cooperation, the development of alternative fuels, and the ability of the sector to adapt to these new economic and organizational challenges. This paper examines the cost aspect of the EU ETS implementation on the various ship types and shipping companies, showing that the success of the newly introduced framework depends on several factors that must be considered. Received: 28 September 2024 Accepted: 26 October 2024 Published: 03 December 2024