As the European Union’s Emissions Trading System (ETS) fully phases in for maritime transport in 2026—covering 100% of relevant emissions, including methane and nitrous oxide—the sector is generating substantial new public revenue. Estimates place this windfall at €7.65–9 billion annually, depending on carbon prices of €85–100 per tonne of CO₂. Yet this revenue is largely flowing into general Member State budgets rather than being targeted for the energy transition, let alone for the developing and vulnerable countries most exposed to both climate impacts and rising trade costs. The PATNA Initiative’s timely questionnaire on “EU ETS maritime revenue and shipping decarbonisation in vulnerable countries” poses precisely the right questions: How could these revenues support shipping decarbonisation in developing countries, and what does this mean for the IMO’s delayed Net-Zero Framework?
The numbers are striking. According to analysis by the European Community Shipowners’ Associations (ECSA), shipping contributes up to €9 billion a year to EU and national coffers under a €100/t scenario, of which roughly €7.7 billion goes to Member States. Germany tops the list at around €1.7 billion, followed by Poland, Italy, and Spain. Cyprus, a major shipping registry, receives far less—around €73 million. Critically, in recent reporting, Member States spent only about 5% of total ETS revenues on energy transition measures, despite legal obligations under the ETS Directive to prioritise climate action, including maritime decarbonisation. Only a handful of countries, such as France and Estonia, have earmarked dedicated shares for shipping. Meanwhile, sustainable marine fuels remain on average four times more expensive than conventional ones. Europe’s annual investment need for its own shipping transition is estimated at €40 billion, yet fuel production capacity lags, with Asia dominating green fuel projects.
For vulnerable countries—Least Developed Countries (LDCs), Small Island Developing States (SIDS), and many African and developing economies—the picture is more nuanced than simple cost pass-through. Studies, including from Transport & Environment, show the current ETS design has limited negative impacts on most SIDS and LDCs. The largest relative effects fall on a few West African countries (15–19% of their shipping traffic regulated), while impacts on Asian and Pacific SIDS/LDCs are near zero. Extending coverage—by closing exemptions for smaller ships and ice-class vessels, and moving from 50% to 100% of voyages between EEA and non-EEA ports—could generate enough additional revenue by 2030 to cover roughly 20% of the EU’s share of earlier global climate finance goals. An “ETS-as-a-service” model applied to neighbouring ports (e.g., Morocco, Egypt, Turkey) could further expand coverage while sharing revenues with those countries without requiring them to build their own systems.
This is where the opportunity lies. Revenues need not merely offset European costs or pad national treasuries. A deliberate portion could be channelled as climate finance to support port infrastructure, green shipping corridors, capacity building, and the uptake of zero- and near-zero emission fuels and technologies in developing countries. Shipping is the backbone of global trade for many commodity-exporting nations in Africa and beyond; higher freight costs risk compounding their vulnerability. At the same time, these countries often lack the fiscal space and technical capacity to invest in the transition themselves. Targeted revenue use—both in-sector (technology support for recipients that can absorb it) and out-of-sector (broader climate finance, adaptation, food security)—can address equity barriers that pure market mechanisms ignore. Research underscores that early movers in green shipping are predominantly wealthier nations; without purposeful redistribution, the transition risks locking in exclusion.
The PATNA Initiative, with its Afrocentric focus through projects like LEAP (Leading Effective Afrocentric Participation), has already built foundational evidence: the first voyage-based GHG inventories for several African states (Ghana, Nigeria, Namibia, Malawi, Kenya, Liberia) and case studies on economic impacts for key commodities. This questionnaire extends that work by soliciting views from policymakers, researchers, civil society, shipowners, and agents precisely on revenue use and links to global rules. Anonymous responses and optional follow-up interviews can surface practical pathways that top-down modelling often misses—how revenues could fund bunkering infrastructure for alternative fuels in African ports, training for seafarers and regulators, or pilot projects that reduce the cost of compliance for vessels serving developing-country trades.
This debate is inseparable from the International Maritime Organization’s Net-Zero Framework (NZF). Approved in principle at MEPC 83 in April 2025, the NZF would introduce the world’s first global GHG fuel intensity standard (well-to-wake) for ships above 5,000 GT, paired with a two-tier pricing/compliance mechanism and a Net-Zero Fund. Implementation was originally targeted for 2028, but adoption was postponed by a 57–49 vote in October 2025 amid opposition led by the United States, Saudi Arabia, and others. A decisive vote is now scheduled for early December 2026 following MEPC 85. The framework’s economic element is expected to raise roughly $10–15 billion annually, with intense negotiations over revenue allocation—whether primarily for in-sector technology incentives or also for equity-oriented support to vulnerable states.
The EU ETS experience offers both a cautionary tale and a constructive precedent. Regional carbon pricing can generate real money and drive some behavioural change, but without explicit earmarking and international redistribution, it risks being seen as a Northern fiscal tool rather than a just transition instrument. If the EU were to dedicate a meaningful, predictable share of maritime ETS revenues to international climate finance—particularly for shipping-related needs in LDCs, SIDS, and African states—it would strengthen its diplomatic hand at the IMO. It would demonstrate that carbon pricing can be designed with equity at its core, reducing resistance from developing countries that fear disproportionate economic harm. Conversely, continued under-investment in both European and global shipping transitions undermines credibility: shipowners note that the sector pays a disproportionately high share of ETS revenues (nearly 20% of system revenues for ~10% of emissions, with no free allowances) while receiving minimal dedicated support.
Practical steps are available. The ongoing EU ETS review (shaping the 2031–2040 period) should introduce binding requirements for Member States to earmark a defined share of international and shipping-related revenues for climate finance and maritime decarbonisation, including a dedicated stream for vulnerable countries. Proposals such as a Sustainable Maritime Alternative Propulsion mechanism need scaling. At the IMO, the NZF’s fund design should prioritise both technology deployment and vulnerability-adjusted transfers. Civil society, researchers, and industry respondents to the PATNA survey can help map feasible modalities: concessional finance for green port projects, results-based payments for emissions reductions on developing-country routes, or co-financing of African green shipping corridors.
The stakes are high. Shipping carries over 80% of global trade by volume. Decarbonising it is essential for climate goals, yet a poorly designed transition could raise costs for the poorest without delivering commensurate benefits. The EU has created a revenue stream; the question is whether Europe and the international community will treat it as a tool for shared prosperity or merely another fiscal transfer within wealthy jurisdictions. The PATNA questionnaire is more than a research exercise—it is an invitation to shape a fairer outcome before the December 2026 IMO decision and the next phase of EU ETS rules lock in the architecture for a decade. Policymakers, shipowners, and civil society in vulnerable countries should seize it. The alternative is a green transition that leaves too many behind.