How will the EU’s ETS affect the dredging industry?

The European Union’s Emissions Trading System (ETS) is at the heart of the EU’s policy to combat climate change cost-effectively – but how will it affect the dredging industry?

The ETS is a cap-and-trade system that uses a carbon market system to reduce emissions. The scheme is gradually being extended to the maritime sector, which is responsible for 3-4% of the EU’s total carbon emissions. This was over 144 million tonnes in 2019.

In 2023, a three-year phase-in began, with 20% of verified emissions reported, rising to 45% in 2024, 70% in 2025, and total compliance thereafter. The requirements for shipping will include emissions monitoring, purchasing and surrendering of ETS emission allowances per emitted greenhouse gas tonne. There will be equal treatment on routes as well as flag neutrality.

The ETS extension to the maritime sector will use the same CO2 price across sectors, a yearly cap on the total emissions covered by the system with a gradual reduction of the cap over time.

For the time being, the dredging industry is excluded from ETS compliance, as outlined in this Central Dredging Association (CEDA) report Energy Efficiency Considerations for Dredging Projects and Equipment.

This is because the extension of ETS to shipping only obligates those ships covered under Monitoring, Reporting and Verification (MRV) rules – that is self-propelled ships over 5,000 gross tonnes that transport cargo for commercial purposes at European Economic Zone ports, except those used for certain applications. These may include dredging, ice-breaking, offshore installation activities, fishing, warships and government ships.

But in 2026, the European Commission is to review whether general cargo and offshore ships between 400 and 5,000 Gross Tonnes will be added to the ETS scheme. If so, the offshore category would encompass larger marine dredgers including many Water Injection Dredgers and Trailing Suction Hopper Dredgers. This would bring about major cost increases from 2027 to dredging in ports and harbours in the European Union and surrounding countries if the dredger was based in the EU.

However, this is where innovations such as Tiamat, a hydrodynamic dredger, stands out by integrating with compliant work boats. Thanks to its adaptability and scalability, Tiamat can be deployed or retrofitted on small vessels, that are less than 400 gross tonnes, so dredging with Tiamat would not be impacted by the ETS.

It has been estimated by risk management specialist DNV that the cost of the shipping industry complying with ETS could be up to €10 billion a year by 2026, increasing fuel-related costs by around 50%.

With such financial pressures, port authorities are always looking for ways to save money on marine dredging projects and improve efficiency.

So, it is great news that Tiamat can reduce marine dredging costs by up to 35% without compromising on productivity. This is because a bespoke vessel is not required to complete the work, nor to dispose of the sediment, as this is carried out using the energy of the tide.

Without compromising on productivity, Tiamat is a more sustainable method of maintenance dredging that ‘dredges with nature’ by utilising the power of the tide and currents. Recent trials and comparisons with traditional dredging methods have revealed that Tiamat significantly reduces GHG emissions by approximately two-thirds of those associated with a comparable TSHD campaign.

Whether the EU brings the dredging sector into its ETS remains to be seen, but there are ways to align with the global drive towards a net-zero carbon economy with solutions such as Tiamat.

Contact us to find out more about the financial and environmental benefits of Tiamat for the dredging industry and to tell us about your dredging project.