Extraterritoriality controversy of EU shipping carbon legislation: multilateral governance tensions and China’s dual responses

The EU has introduced a series of shipping carbon emissions regulations, including the MRV, the EU ETS, and FuelEU Maritime, thereby establishing a port-centric extraterritorial regulatory framework by clearly defining the scope, objectives, and modalities of extraterritorial application. The EU’s maritime carbon emissions regime draws on the theoretical foundations of port state control and territorial extension and, combined with the EU’s dominant position in the global shipping market, enables the exercise of extraterritorial jurisdiction over carbon emissions generated during voyages outside EU waters by vessels calling at or transiting through EU ports. At the same time, an exemption mechanism has been designed to mitigate conflicts arising from such extraterritorial application. The extraterritorial application of EU shipping carbon emissions legislation has triggered disputes over jurisdictional legitimacy, placing pressure on the IMO by weakening its authority and contributing to regulatory fragmentation. It has also intensified divergences between developed and developing States regarding the regulation of shipping carbon emissions with extraterritorial effects. In response to the extraterritorial application of the EU shipping carbon emissions legislation, there are two paths that China can adopt. About the adaptive tools, firstly, it is valuable to add port State jurisdiction over shipping carbon emissions to domestic legislation and strive for equivalent mutual recognition of allowances with the EU ETS. Secondly, efforts can be made to promote the cooperation on the green transition of the shipping industry between the shipping enterprises of China and the EU. About the defensive tools, firstly, on the basis of supporting CBDR, China can collaborate with developing states to promote the development of multilateral governance mechanisms under the IMO and adopt countermeasures when necessary. Secondly, China can activate domestic blocking legislation to prohibit the unjustified extraterritorial application of EU legislations, and establish accompanying compensation mechanisms to safeguard national and enterprises’ interests.