15 Dec ETS Surcharge Commences 1st January 2024
As per the notification in our September newsletter, Europe has officially sanctioned the ETS system and surcharges will commence as of 1st January 2024.
The EU Emissions Trading System (EU ETS) is the European Union’s strategy to tackle climate change by limiting and charging for greenhouse gas emissions. It is a trading system where allowances (EUAs) need to be purchased for the emissions produced in EU waters. These allowances are limited, restricting the number of emissions permissible in Europe.
Shipping organisations will be required to pay a surcharge on greenhouse gas (GGH) emissions from the 1st of January 2024. These funds will be directed into the maritime sector in order to fund its transition to alternative energy sources via the EU Innovation Fund.
Where does it apply?
- The EU ETS applies to all ports within the European Economic Area + European Free Trade Association.
- However special rules apply for selected non-EU transshipment ports less than 300 nautical miles away from next EU port.
- For in and outbound voyages to/from EU ports via one of these T/S ports, 50% of emissions for the entire voyage need to be accounted for (not only 50% for the leg to/from the EU port).
- A draft of EU ETS rules identifies Tanger Med and East Port Said as such T/S ports, with the final list to be published before end of 2023.
The surcharge will be levied quarterly on cargo owners from the first quarter of 2024, with shipping required to pay for allowances covering 40% of GHG emissions in 2024, rising to 70% in 2025 and 100% from 2026.
Shipping lines have confirmed that these costs will be passed on in the form of a standalone surcharge that will apply to all shipments that will be subject to the EU ETS.
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