Addressing competitivity challenges : proposed amendments to Directive 2023/959 under the EU ETS Fit for 55 Framework

Abstract

The European Union’s Green Deal, aimed at achieving climate neutrality by 2050, introduced comprehensive regulatory frameworks which includes the Fit-for-55 package. The primary aim being reduction in greenhouse gas emissions across key sectors. Directive 2023/959, an amendment to the EU Emissions Trading System (ETS), extends carbon pricing obligations to maritime transport. A sector historically unregulated under EU climate policies. This directive, while advancing the Union’s decarbonization agenda, has inadvertently created competitive disparities between EU based transshipment hubs and non-EU ports in the Mediterranean. Due to the geographical proximity of EU and non-EU ports, shipping lines can strategically reroute cargo to avoid EU-imposed carbon costs thus, exacerbating economic imbalances and undermining the directive’s environmental objectives. This dissertation critically examines the regulatory framework and economic implications of Directive 2023/959, with a focus on transshipment hubs in the Mediterranean. It analyzes the legal underpinnings of the directive, its intersection with EU principles of proportionality and equal treatment and the potential for regulatory avoidance. The study proposes targeted amendments to Directive 2023/959. This includes the implementation of a global carbon pricing framework under the International Maritime Organization (IMO), clarification of liability allocation under Article 3gg, and the introduction of a leakage-resistant framework to mitigate strategic rerouting. By addressing these regulatory gaps the dissertation aims to realign the EU ETS with its intended climate objectives while safeguarding competitive parity for EU ports.