Summary

• Fuel subsidies in the form of tax exemptions or reductions are a barrier to implementation of better energy technologies and practices.
• Important synergies between removal of fuel subsidies, the energy transition and a healthier marine environment should be exploited.
• More robust fish stocks make for more efficient use of energy in fishing and thereby contribute to the energy transition.

Subsidies

A key financial and governance barrier that hinders the uptake of technologies and practices necessary to reduce the climate impact of fisheries are the subsidies to fisheries, in particular the exemption from full carbon pricing via taxes or emission trading rights. This makes all other measures less efficient and less effective. Fuel subsidies reduce incentives to invest in more efficient engines or use less fuel-intensive practices. It is inefficient to try to solve problems caused by subsidies with more subsidies.

The Commission has proposed a much lower tax for the fisheries sector than other sectors in the Energy Tax Directive. The consequence would be a continued massive subsidy to fishing.

When a revised ETD requires unanimity, it may fall. Therefore, inclusion of fisheries in the emissions trading system should be prepared as an alternative. 

Purchases of fuel outside the EU by vessels with quota to fish in EU waters are in effect imports of fuel to the EU and should be taxed as such.

There may be a risk that EU fishers who pay a full carbon price will be outcompeted in the European market by fishers from third countries. If so, protection under the Carbon Border Adjustment Mechanism should be extended to the fishing sector.

In a market economy, economic crises are a corrective to overcapacity such as has plagued fishing. By repeatedly responding to crises with subsidies, the EU sets an important market mechanism out of force. Short-term crisis measures must be combined with compensatory measures, or goal achievement will be delayed. Thus, the latest emergency support should have gone hand in hand with effective measures to reduce overcapacity.

Fuel subsidies contribute to the overcapacity that the Commission has identified as a core contributor to problems of European fisheries, including poor profitability and lax compliance, depleted stocks and degraded marine environments. Subsidies such as fuel tax exemptions have been therefore been classified as “harmful” (Skerritt, Sumaila 2021). Failure to account for the decreased natural carbon sequestration caused by fishing can is in effect also a subsidy (Martin et al 2021).

Efficiency

Efficiency in energy use is a key aspect of the energy transition. Methods such as bottom trawling tend to be less energy efficient than others (Sala et al 2022).

Larger fish stocks require less energy to catch a given amount of fish than do more depleted stocks. Therefore, an efficient energy transition requires that the EU achieves the objective of progressively restoring and maintaining populations of fish stocks above biomass levels capable of producing MSY as mandated by Article 2.2 of CFP Regulation.  The EU should not “achieve “the objective by reinterpreting “biomass levels capable of producing maximum sustainable yield” as Btrigger or some other target significantly lower than BMSY. If it is not possible to reliably estimate BMSY a more suitable proxy such as 2 x Bpa should be used (Froese et al 2016).

Reducing fishing pressure to levels consistent with the environmental objectives of the CFP would further increase energy efficiency. The Commission should routinely request ICES to provide advice on the likely impact of such limitations on the catch as may be required to achieve environmental objectives such as biodiversity (including genetic diversity within the target stock), habitat integrity and foodwebs, under the Specific Grant Agreement between the European Union and ICES.