ASIA-BASED ocean carriers will face a bill of EUR500 million (US$540 million) this year for compliance with the European Union Emissions Trading System (ETS), with the annual cost rising to EUR1 billion once the mechanism has been fully rolled out, according to maritime technology firm OceanScore.
While carriers won't be billed for this year's emissions until early 2025, shippers will feel the financial impact from the end of the 2024 first quarter as the cost of compliance is assessed per TEU and passed onto cargo owners through surcharges.
'It is vitally important that non-European Union actors engaged in trading vessels to and from the EU become fully up to speed with the regulation and put systems in place to manage and mitigate their EUA [EU Allowance] liabilities,' Albrecht Grell, co-managing director at OceanScore, said in a statement.
EUAs, or carbon credits, must be surrendered by carriers for voyages to and from the EU that are liable for 50 per cent of emissions, while port calls and transits within the EU are liable for 100per cent of their emissions.
Mr Grell said almost 80 million EUAs will have to be surrendered by the shipping industry once the ETS is fully phased in, of which 40 per cent would come from non-EU companies.
At full phase-in, approximately 5.5 million EUAs will have to be surrendered by Chinese and Hong Kong-based entities and 5.4 million by Singaporean players, with the remainder coming from Japan (1.6 million), South Korea (1.2 million) and India (1.1 million). When other asian countries such as Thailand and Malaysia are included, the total number of EUAs required rises to 20 million, according to New York's Journal of Commerce.
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While carriers won't be billed for this year's emissions until early 2025, shippers will feel the financial impact from the end of the 2024 first quarter as the cost of compliance is assessed per TEU and passed onto cargo owners through surcharges.
'It is vitally important that non-European Union actors engaged in trading vessels to and from the EU become fully up to speed with the regulation and put systems in place to manage and mitigate their EUA [EU Allowance] liabilities,' Albrecht Grell, co-managing director at OceanScore, said in a statement.
EUAs, or carbon credits, must be surrendered by carriers for voyages to and from the EU that are liable for 50 per cent of emissions, while port calls and transits within the EU are liable for 100per cent of their emissions.
Mr Grell said almost 80 million EUAs will have to be surrendered by the shipping industry once the ETS is fully phased in, of which 40 per cent would come from non-EU companies.
At full phase-in, approximately 5.5 million EUAs will have to be surrendered by Chinese and Hong Kong-based entities and 5.4 million by Singaporean players, with the remainder coming from Japan (1.6 million), South Korea (1.2 million) and India (1.1 million). When other asian countries such as Thailand and Malaysia are included, the total number of EUAs required rises to 20 million, according to New York's Journal of Commerce.
SeaNews Turkey
