Decarbonization of Short Sea Shipping in European Union: Impact of market and goal based measures

Abstract

In July 2021, the European Union (EU) published a package of measures for the decarbonization of maritime transport: Market Based Measures (MBM) and Goal Based Measures (GBM) that will gradually be phased in over 2023. The measures derive from an EU decision taken independently of the International Maritime Organization. This fragmentation of maritime transport governance leads to new working scenarios in the EU that have given rise to concern in the shipping industry. This paper analyzes the monetary consequences of EU decarbonization regulation on Short Sea Shipping (SSS) by introducing a mathematical model to meet this aim. From the application of this model to SSS container vessel operating between the Canary Islands and the Iberian Peninsula, it is found that, although MBM accurately reflect the pollutant impact of SSS vessels in the aftermath of the 2020 Global Sulphur Cap, only GBM along with non-compliance deterrents can redirect the vessels’ investments towards more sustainable solutions in the medium-term.