Maritime transport activities are now covered under EU Directive (2003/87/EC) establishing a system of trading greenhouse gas emission allowances within the EU, which will take effect on January 1, 2024. The directive makes a distinction between trips inside Member States and trips out of and into the EU. The need for the shipping firm is to surrender credits equal to 50% of the emissions for ships executing voyages departing from a port outside the EU and arriving at a port within the EU or departing from a Member State port and arriving at a port outside the EU. For journeys made inside the EU, 100% of the emissions are required.
Shipping companies operating ships that fall under the purview of the directive will be required to surrender allowances for 40% of the verified regulated greenhouse gas (GHG) emissions reported for 2024 and for 70% of the GHG emissions reported for 2025. The directive will apply to ships of 5,000 GT and above and be phased in. The requirement increases to 100% starting in 2026.
The “shipping company” is accountable for surrendering the allowances in compliance with the directive (article 3v). The International Management Code for the Safe Operation of Ships and for Pollution Prevention defines the shipping company as “the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner and that, upon assuming such responsibility, has agreed to take over all the duties and responsibilities imposed by the Code.”
The term of “shipping company” is expected to get further clarification from the EU Commission soon.
All market participants must get familiar with the directive and what it may signify for them.
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