Policy & Compliance
Controversy over ETS surcharges A study has found that in nearly 90% of cases, shipping companies are charging customers more than the actual costs of the EU ETS
T here have been various reports recently stemming from a Transport & Environment https://www.transportenvironment. org (T&E) study that shipping lines are making a pro fi t from the implementation of the EU Emissions Trading System (ETS). The need to reduce carbon emissions in global supply chains is widely accepted. BIFA had immediate concerns regarding the EU ETS, voicing fears that it would lead to another surcharge being introduced. Given the opaque nature of surcharges, ensuring that they are not simply an additional source of revenue or profit is challenging. The Association is not surprised by the T&E report, which supports the view that surcharges need to be kept to a minimum both in terms of their number and level of charging. BIFA and international partners CLECAT and FIATA have repeatedly called on carriers to exercise care when imposing such surcharges to ensure they cover only the costs incurred by the reason for the surcharge, including compliance with ETS. ETS surcharges should not become a revenue/profit stream for carriers at the expense of their customers and of the decarbonisation of maritime shipping. Windfall pro fi ts The T&E study, entitled Profits Uncontained , was published in March and analyses how ocean carriers are making profits from the implementation of the ETS to maritime transport by charging ETS surcharges above their actual ETS costs, resulting in a source of
“ BIFA and international partners CLECAT and FIATA have repeatedly called on carriers to exercise care when imposing such surcharges to ensure they cover only the costs incurred by the reason for the surcharge, including compliance with ETS
windfall profits. Prior to looking at the precise figures, it must be emphasised that the shipping lines, and especially Maersk, have vigorously denied the allegations arguing that the figures are based upon out-of-date information and flawed modelling. T&E analysed over 500 journeys from 20 different ships from each of Europe’s biggest carriers (Maersk, MSC, CMA CGM and Hapag-Lloyd), modelled their expected ETS costs based on past journeys and emissions data and compared them with the ETS surcharges announced by carriers at the end of 2023 before the launch of ETS maritime on 1 January 2024. The study found that in nearly 90% of cases, shipping companies are charging customers more than the actual costs of the EU ETS. Overall, Maersk adds on average around €60,000/voyage, while MSC adds €25,000, CMA CGM €14,000 and Hapag-Lloyd €23,000 per voyage The analysis took several conservative assumptions, including higher emissions efficiency data and lower load factor, which could lower the overall ETS costs of companies while increasing their
profits. In addition, one notable factor to consider is the current price of ETS allowances: the ETS surcharges had been based on an average price (between €80 and €90/tCO 2 ) significantly higher than the current price, around €60/tCO 2 , which can increase the profits even more if ETS surcharges are not revised according to current prices. External factors Nevertheless, current ETS costs are affected by several external factors, most notably by the Red Sea crisis diverting most containerships from the Suez Canal via the Cape of Good Hope, increasing fuel and ETS compliance costs. However, it should be noted that given the tonnage carried on any one vessel the additional cost per teu is relatively small and will have little impact on the cost of moving goods. If the figures in the T&E Report are proved to be correct, it does leave a rather sour taste in the forwarder’s mouth trying to recover the additional costs from an unhappy client. To read the full T&E report, scan the QR code.
8 | May 2024
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