The EU Emissions Trading System (ETS) Now Applies To Ships Over 5000 Gross Tonnage

By January 9, 2024 No Comments

Back in September of 2023 we reported that Marine Transport activities would be covered by EU directive (2003/87/EC) establishing a system of trading greenhouse gas emission allowances from January 1st 2024.
The European Union Emissions Trading System (ETS) has (from the 1st January 2024) now been extended to cover C02 emissions from all large ships of 5000 gross tonnage and above entering EU ports.

This means that shipping companies have to purchase and use EU ETS emission allowances for each tonne of reported CO2 (or CO2 equivalent) emissions in the scope of the EU ETS system. It is the role of administering authorities of EU Member States to ensure compliance using similar rules as for the other ETS sectors.

Shipping companies have to purchase and use EU ETS emission allowances

During the first phase-in period, shipping businesses are only required to use allowances for a fraction of their emissions in order to facilitate a smooth transition:

2025: for 40% of their emissions reported in 2024;

2026: for 70% of their emissions reported in 2025;

2027 onwards: for 100% of their reported emissions.

A reporting and review clause is in place to monitor the implementation of the rules applicable to the maritime sector and to consider relevant developments in the International Maritime Organisation (IMO).

While many transport and logistics organisations are unhappy about the ETS as it will increase their overall operating costs, the EU has described the tax as a “cornerstone” in its policy to combat climate change.

Vassallo Associates offers consultancy, surveying, and inspection services to the Maritime industry. Contact us today to discuss your requirements.

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