ETS Surcharges Due To Be Introduced In January
Various notifications from ocean freight carriers point towards a surcharge being introduced from January to cover the increased requirements of the EU’s Emissions Trading System.
The level of these January surcharges will not be confirmed until at least November. However, carriers are indicating various levels that range between $10 and $45 per TEU, depending on the carrier and trade. Thereafter, it is likely to be reviewed quarterly.
From January 1st, shipping lines are required to meet new ETS requirements, which will see them effectively pay a contribution for every ton of CO2 emitted by their vessels. Each carrier will be required to report their emissions and purchase allowances, which will progressively increase in difficulty.
- in 2024, 40% of reported emissions to be converted into allowances.
- in 2025, 70% of reported emissions to be converted into allowances.
- from 2026, 100% of reported emissions to be converted into allowances.
The EU adopted a legal action plan to reach carbon neutrality by 2050 in the fight against global warming. This includes an interim objective to reduce greenhouse gas emissions by 55% ahead of 2030, and the ETS forms part of that plan.
The EU’s ETS system is the world’s largest emissions trading system and has been set up since 2005 based on a “cap and trade” scheme. The number of allowances available decreases every year, reducing the total greenhouse gases emitted to meet the 2030 and 2050 targets.
