As our global population grows, so too does demand for goods, and so one of society’s greatest challenges is how to meet these needs in a way that is more sustainable, efficient and harmonised with the needs of both consumers and regulators.
No supply chain is isolated from carbon emissions. The work towards finding sustainable solutions for our industry requires resources to support research and development. Environmental taxation is critical for research and development focused on boosting decarbonization options.
In January 2024, the EU's Emissions Trading System (EU ETS) will be extended to cover CO2 emissions from all large ships entering EU ports. This is part is of a series of legislative proposals with the main goal of achieving the EU’s target of 50% reduction in greenhouse gas emissions by 2030, and then climate neutrality by 2050.
What is the Emission Trading System?
Established in 2005, the EU Emission Trading System (ETS) is a market-driven system designed to combat climate change and encourage shippers and customers to reduce greenhouse gas (GHG) emissions. The ETS is based on a 'cap-and-trade' principle, which limits the total amount of greenhouse gas emissions permitted by factories, power plants, ships, and other entities covered by the ETS. Over time, the cap is reduced, leading to a gradual decrease in total emissions.
What is the cost impact?
Ocean carriers have announced the implementation of an ETS surcharge to cover the costs of the CO2 charge of shipping in the EU.
The calculations per TEU will be based on the industry-aligned Clean Cargo methodology for CO2 calculation multiplied by the market price for EUAs sourced from the ICEDEU3 Index using a three-month average. This results in the ETS surcharge amount per TEU, which is updated quarterly.
Carriers are now publishing these charges and we will be updating customers with further information based on your shipment routings and carrier selections.