Policy & Compliance
Maersk has issued guidance on the expected cost increase
The impact of European Emissions Trading Scheme (ETS) on shipping
Shipping companies will from next year have to buy and surrender ETS allowances for the emissions from their ships. Some lines have begun issuing guidance on likely surcharges
This wide difference highlights the uncertainties of additional costs related to the introduction of ETS in maritime shipping. As noted by the ITF report on carbon pricing in shipping, many parameters should be taken into account to assess the final costs to customers, such as the price of ETS allowance (currently around €85 per tonne of CO 2 , but likely to increase), operational decisions from carriers (slow steaming, rationalised journey planning) or even the likelihood of the extra costs being passed on to customers. Green exemptions Finally, both carriers announced that customers using their green fuel programmes would be exempt from ETS surcharges as it would reduce their overall GHG emissions. Obviously other lines will be publishing guidance on their anticipated charges; it will be interesting to see what level of charges are incurred and how this will drive change in the sector. The impact on businesses and where they manufacture goods and how they transport them is the bigger long-term question. That has not yet been answered.
T here is an increasing amount of environmental regulation being implemented that will impact on the shipping and transport industry. Whilst it is unclear what the precise impact of this regulation will be, there are clearly increased cost implications. In many ways, the consumer has been shielded by business from these higher costs. However, some of these additional costs will have an impact on the cost of finished goods and it will be interesting to see whether that curbs enthusiasm for de-carbonisation, etc. Surcharge guidance As the inclusion of maritime emissions into the European Emissions Trading Scheme (ETS) will start in 2024, ocean shipping companies have started to issue guidance on the level of ETS surcharges that will likely be added to their freight rates. For reference, shipping companies will have to buy and surrender ETS allowances for the emissions from
their ships. 100% of emissions on intra-EU journeys will be taken into account, and 50% of emissions for journeys to/from an EU port to/from a third country. It will be implemented in phases, with 40% of greenhouse gas (GHG) emissions to be paid in September 2025, but covering the period from 1 January 2024. In 2026, carriers will pay for 70% of emissions generated in 2025 and, from 2027, carriers will have to pay for 100% of the emissions generated in 2026 and onwards. Maersk and Hapag-Lloyd have both issued guidance on the expected cost increase, providing several surcharge rates according to the route and the type of container (normal or reefer). However, they differed wildly on the expected level of the additional costs; while Hapag-Lloyd estimated that a container shipped from Asia to North Europe would incur €12 per teu in ETS surcharges and €31 for a reefer, Maersk advised that the same journey would cost customers an additional €70 per teu and €105 per reefer.
“ Maersk and Hapag- Lloyd have differed wildly on the expected level of the additional costs
8 | November 2023
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