ETS impact on ferry industry

EU is introducing Emissions Trading System to the shipping sector, starting on 1st of January 2024.

ETS impact on ferry industry

Fjord Line’s FSTR ferry. Source: Wikimedia Commons / CC BY-SA 4.0 DEED

What is ETS?

EU ETS (EU Emissions Trading System) is a vital element of European Union’s environmental policy. It is a trading scheme, which started in 2005 and its main objective is reducing greenhouse gas emissions in EU’s countries plus Iceland, Liechtenstein and Norway.

ETS makes polluters pay for their gas emissions, which results in motivation to search for green solutions. The ETS system is a “cap and trade” kind of scheme. A limit (the cap) to the amount of emitted pollutants is placed. A company is obliged to purchase 1 EUA (European Union Allowance) for every reported tone of CO2 and submit it to the EU each year.

For now ETS first phases cover CO2 emissions, but European Union plans to incorporate nitrous oxides, soot and methane emissions.

How will ETS influence maritime transport?

The scheme is divided into four periods. The fourth period includes involving all shipping companies from 2024. ETS introduces carbon pricing for shipping on January 1. Ferry operators will have to purchase those allowances while also investing in alternative fuels.

All ferry companies that offer cruises from or to EU’s ports will charge additional fees once the change is implemented on January 1, because ETS will have a significant impact on the cost of the industry.

The scheme below shows changes for maritime transport that EU ETS will implement in the near future. Shipping companies must use their first ETS allowances by 30 September 2025 for emissions reported in 2024. The share of emission that must be covered by allowances increases each year:

  • 2025: 40% of emissions reported for 2024 must be covered by emission allowances,
  • 2026: 70% of emissions reported for 2025,
  • 2027 and beyond: 100% of reported emissions.

eu-ets-extension-to-maritime-transport-01.png
Source: European Maritime Safety Agency

How much is ETS surcharge?

Ferry operators start to show estimated values of ETS surcharge, as if they are to be implemented before the start of 2024. Please, remember that ETS will be charged along with BAF surcharges.

Below you can find exemplary values of ETS surcharge in euro per each running meter:

  • Gdynia – Karskrona (Stena Line): 1,33 EUR / m,
  • Hoek van Holland – Harwich (Stena Line): 0,51 EUR / m,
  • Rosslare – Cherbourg (Stena Line): 4,16 EUR / m;
  • Calais/Dunkirk – Dover (DFDS): 0,24 EUR / m;
  • Świnoujście – Trelleborg (TT-Line): 1,10 EUR / m.

Please, be informed that these surcharges are estimated for the month of November 2023 and they are to change in 2024, when ETS surcharges will in fact be in use.

Sources:
[climate.ec.europa.eu]
 

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