Assessment of operational changes in the maritime transport with the introduction of the EU ETS

Abstract

While the European Union is implementing new environmental measures, this thesis explores the segment-specific impacts of the European Union Emissions Trading System (EU ETS) on the shipping industry. By examining data from the Automatic Identification System, this study details the policy's short-term environmental effects across different shipping segments, focusing on the first quarter following its implementation in January 2024. To do so, our observations are mainly based on visual representation of the data and on difference-in-differences analysis. The most important observation we make is that the EU ETS has been responsible for a decrease per voyage of 15.38 tonnes of CO2 equivalent since its introduction. Furthermore, we demonstrate that this impact has been larger on small-sized vessels as they show more significant reduction in speed and pollution levels. Further we show that the market is very sensitive to carbon allowances prices as, since 2024, voyages display a reduction of 15.16 tonnes of CO2 equivalent per euro increase in the prices of allowances, meaning that policymakers can optimize the efficiency of the measure by monitoring prices. Finally, we looked for carbon leakage by observing the evolution of emissions in ports situated close the European Economic Area but found no significant evidence of rerouting. However, all these observations are based only on the initial response of the sector to the new measure. Therefore, it is important to continue measuring the effectiveness of the system in the upcoming months. This assessment will help estimate its long-term influence and adjust the system if the results deviate from the objectives of the European Union concerning environmental protection.