EU carbon rules reshape competition between Tanger Med and southern European ports

New European Union rules aimed at reducing emissions from maritime transport are becoming an increasingly important factor in competition between ports on both sides of the Strait of Gibraltar. As carbon costs become part of shipping companies' calculations, operators are reassessing routes, transshipment hubs and the overall cost of moving goods through European ports.

This shift has placed Tanger Med Port in a potentially advantageous position. Located outside the European Union but close to Spain, the Moroccan port can serve as an important transshipment hub connecting Europe with Asia, Africa and the Americas.

The change is linked to the European Union Emissions Trading System (EU ETS), which requires shipping companies to acquire allowances covering emissions generated by voyages falling under the scheme. As the system has expanded, carbon expenditure has become an additional operating cost for maritime operators.

From 2026, shipping companies are required to account for 100% of covered emissions, compared with 40% in 2024 and 70% in 2025. The scope has also expanded beyond carbon dioxide to include methane and nitrous oxide.

The new framework adds an environmental component to traditional port-selection criteria. Shipping companies have historically focused on factors such as handling costs, capacity, turnaround times, connectivity and logistical efficiency. Carbon-related expenses are now becoming another consideration when designing maritime networks.

Voyages between two EU ports are subject to full coverage under the system, while voyages connecting an EU port with a non-EU port are subject to different coverage rules. Emissions generated while ships are at European ports are also taken into account.

As the obligations increase, the financial impact of emissions can become more significant, potentially encouraging shipping companies to reconsider the organization of certain transshipment operations.

This does not necessarily mean that European ports will lose business. However, it creates an incentive for shipping operators to examine whether some transshipment activities could be carried out more efficiently through nearby non-EU hubs.

European policymakers have anticipated the risk that shipping companies could move transshipment operations to neighboring ports outside the bloc solely to reduce their exposure to the carbon system. As a result, the EU has established specific rules concerning certain nearby non-EU ports that have significant transshipment activity.

Tanger Med and Egypt's Port Said East are among the ports considered within this regulatory framework. The objective is to limit potential circumvention of EU climate rules through the relocation of container transshipment to nearby ports outside the bloc.

Therefore, Tanger Med's location outside the EU does not automatically eliminate carbon-related costs. European regulations include mechanisms designed to monitor transshipment patterns and reduce incentives for artificial rerouting.

Nevertheless, shipping companies may still redesign their networks when alternative routes provide a more competitive combination of logistical efficiency and operating costs.

The development is particularly significant for the competition between Tanger Med and Spain's Port of Algeciras. Located on opposite sides of the Strait of Gibraltar, the two ports compete directly for container traffic and transshipment business.

Recent trends indicate that Tanger Med has continued to strengthen its position in Mediterranean container traffic, while transshipment activity at Algeciras has faced pressure. According to the figures cited in the analysis, transshipment volumes at Algeciras declined from approximately 5.2 million TEUs to around 4.6 million.

The analysis also estimated Tanger Med's share of traffic entering Mediterranean ports at approximately 37% in 2026 when measured using TEU-miles, compared with around 20% for Algeciras.

These developments suggest that port competition is no longer determined solely by geographical proximity. Environmental compliance costs, network efficiency and the ability to provide competitive transshipment services are becoming increasingly important.

However, Tanger Med's growing importance cannot be attributed exclusively to the EU carbon market. The Moroccan port had already established itself as a major international maritime hub before the EU ETS began covering shipping.

Its development has been supported by major infrastructure investments, a strategic position at the crossroads of major maritime routes and strong links with international shipping companies.

In 2025, Tanger Med handled more than 11.1 million TEUs, representing an annual increase of 8.4%. During the first quarter of 2026, total cargo traffic reached approximately 38.8 million tonnes, up 3.2% from the same period a year earlier.

These figures demonstrate that the port's competitiveness is based on a broader model combining infrastructure, connectivity, logistics and transshipment capacity. The carbon factor adds another potential advantage, but it is not the sole explanation for Tanger Med's performance.

At the same time, Brussels is monitoring how the EU ETS affects maritime networks, particularly the use of neighboring ports outside the European Union. Future adjustments to the rules remain possible if policymakers conclude that significant amounts of activity are being diverted away from European ports.

Such changes could modify the competitive balance and reduce some of the advantages currently associated with operating outside the EU regulatory framework.

For European policymakers, the objective remains to make maritime emissions increasingly costly in order to encourage cleaner vessels, fuels and technologies. Yet the policy may also have unintended consequences for the geography of global shipping and competition between ports.

Tanger Med appears well positioned to benefit from this changing environment thanks to its location outside the EU, proximity to European markets, extensive infrastructure and strong transshipment activity. Its long-term advantage, however, will depend on how European regulations evolve and whether the Moroccan port can continue offering shipping companies competitive costs, efficiency and reliable connectivity.