Wednesday, November 11, 2026
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Ocean Nov 11, 2026 · 8 min read

Ports and carriers ask the EU to fix the ETS transshipment gap

Europe’s hubs ask for a carbon discount, and the shipping lines have signed on

Four of the biggest voices in European shipping have put their names to one letter. ESPO, the European Sea Ports Organisation, joined FEPORT, the Federation of European Private Port Operators. So did the World Shipping Council (WSC), which speaks for the container lines, and Assarmatori, the Italian shipowners’ association. On 10 November it was reported that they had written to the EU’s co-legislators, the European Parliament and the Council. The letter is titled “Retaining Transshipment Traffic and Investment in European Ports”.

The subject is transshipment. That means unloading boxes from a big ocean ship at a hub and reloading them onto another ship, often a smaller feeder, for the final leg. Their complaint is that the EU’s carbon market pushes that business out of the EU to hubs just across the water.

The groups do not ask for a new idea. They back one the European Commission has already proposed: a measure built for transshipment under Article 12.3.g of the revised ETS Directive. They ask for three amendments. The published report of the letter gives no figures and no target dates.

Our view is that this letter matters less for what it demands than for who signed it. As recently as July, ports and container lines were pulling in different directions on how to stop ETS leakage. Here they agree on one route: make an EU hub stop cheaper, rather than make a non-EU hub stop dearer. That is the fix most likely to survive the legislative process. It is also the slowest to reach a forwarder’s invoice.

How the leak works

The ETS, or Emissions Trading System, makes polluters buy an allowance for each tonne of CO2 they emit. Shipping joined in January 2024. Carriers phased in their liability over three years. Hapag-Lloyd’s customer notice gives the steps: “40% of emissions covered in 2024”, “70% of emissions covered in 2025” and “100% of emissions covered from 2026 onwards”.

The scope is set by geography. In 2026, ships pay for 100% of emissions on voyages between two EU ports. They pay for 50% on voyages into or out of the EU, up from 35% in 2025, according to ENGINE’s January report.

That creates the leak. Take a box going from Asia to West Africa. If it is transshipped at a Mediterranean hub inside the EU, the carrier owes ETS on the leg in and the leg out. If it is transshipped at Tanger Med in Morocco, or East Port Said in Egypt, it owes nothing. Both ports are on the EU’s list of neighbouring container transshipment ports, which exists to stop carriers from using them to dodge the rules. But that list catches carriers who use them to break up an EU voyage. It does nothing for cargo that never needed to touch the EU at all.

WSC put the problem plainly in July. It welcomed the Commission’s recognition that the current design can make European ports “more expensive and less competitive” for cargo that moves between two non-EU markets and is transshipped in Europe.

ESPO went further in May, before the Commission’s proposal. It said “the first and main impact is being felt in Europe’s big transhipment ports in the Med”. It also said: “The capacity in the EU neighbouring countries is increasing steeply and rapidly to the detriment of EU ports.” Its Secretary General, Isabelle Ryckbost, said: “We cannot longer accept a policy that creates carbon leakage.”

One caution. None of these statements comes with traffic data. ESPO published no lost-call or volume figures, and neither does the report of this week’s letter. The leakage case is an industry argument, not a measured result.

What the four groups are asking for

The letter welcomes the Commission’s transshipment measure under Article 12.3.g. Then it asks for three changes, as reported by El Estrecho Digital.

First, the mechanism should cover voyages that both start and end in the EU. The groups say this takes account of how intercontinental services operate. Our example: a loop that calls at Rotterdam, then a Mediterranean hub, then heads to Asia has legs that start and end inside the EU.

Second, it should apply to all services that make transshipment calls at EU ports, not only certain movements.

Third, it should be simple to apply and identical for every EU port. That is aimed at any version that would favour one country’s hubs over another’s.

The El Estrecho report also notes that FEPORT had already argued that the cargo-destination mechanism should cover outbound journeys from the EU.

Why the shipping lines signed this one

The interesting name on the letter is the World Shipping Council. In July the Commission published its ETS review. It proposed cutting the share of transit containers that makes a non-EU port count as a “neighbouring transshipment port” from 65% to 50%, El Estrecho reported at the time. It proposed reviewing the list every year instead of every two years. It also proposed catching facilities with container transshipment infrastructure less than 150 nautical miles from an EU port. A separate Commission draft, put out for comment in July, would add Abu Qir and Damietta in Egypt to the list, according to Norway’s environment agency.

WSC did not like the infrastructure test. Its vice president for environment and climate, Simon Bergulf, said: “The ETS should be focused on cutting emissions, not making neighbouring non-EU ports less competitive.” WSC warned that ports within 150 nautical miles could be penalised just for having deep water, long berths and ship-to-shore cranes.

Assarmatori was lukewarm too. El Estrecho reported that the group called the July proposal “too timid”. It said its president, Stefano Messina, welcomed the discount for intercontinental container transshipment but found its scope “still insufficient”.

So the carriers resist a longer blacklist. The ports want leakage stopped. The one tool they can all back is a measure that lowers the ETS bill when ships transship inside the EU. Our view: that is what this letter is. It is a peace treaty on the narrow ground where ports and lines agree.

What it means for forwarders

The cost at stake is not small. Ahead of full coverage, Hapag-Lloyd told customers it expected its ETS surcharge to rise “approximately 45%” because of the move to full coverage. ENGINE reported that Hapag-Lloyd’s Far East to North Europe surcharge rose $54 in a quarter to $168 per 40ft dry container. Going the other way it rose $36, to $113.

Those numbers sit on direct mainline routings. The transshipment problem bites harder on cargo that is relayed. A box moving from Asia to North Africa, West Africa or the Eastern Mediterranean via an EU hub picks up ETS cost that the same box via Tanger Med does not. Over time, carriers will route that cargo to wherever it is cheapest.

Here is what we think follows, if the fix passes in the shape the four groups want.

Relay cargo through Algeciras, Valencia, Piraeus and the Italian hubs becomes cheaper in ETS terms. Carriers have less reason to shift those relays to Morocco or Egypt. Feeder links from EU hubs to smaller EU ports are more likely to survive. That matters to forwarders who ship to secondary Mediterranean ports that rely on them.

The “start and end in the EU” amendment is the one to watch. If it goes in, long loops that touch several EU ports could see part of their ETS bill reduced. That would reach North Europe cargo, not just the Mediterranean.

Here is what does not follow. None of this changes your surcharge line soon. The measure has to get through Parliament and Council negotiations. It then has to take effect and feed into carriers’ quarterly surcharge formulas. In our view, allowance prices and FuelEU Maritime costs will move those lines far more in the meantime.

For now, two practical points. First, when you compare a routing via an EU hub with one via Tanger Med or East Port Said, ask for the ETS element as a separate figure. The gap between them is the leakage. Second, if you move relay cargo to Africa or the Eastern Mediterranean, expect carriers to keep favouring non-EU hubs in 2027 schedules. Nothing in this letter changes their sums for next year.

Our call

Our prediction: no carrier will lower its ETS surcharge on any lane because of a transshipment measure before January 2028. The legislative timetable is too long, and the letter, as reported, names no dates.

We also expect the final text to include at least the “all services” amendment. It costs EU governments little and has the backing of both ports and lines. The “start and end in the EU” amendment is the hardest to win, because it gives the most money back. We expect it to be narrowed or dropped.

Watch for one sign that we are wrong. If the European Parliament’s lead committee adopts all three amendments unchanged in the first half of 2027, the fix is moving faster than we think.

Sources

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