EU Emission Trading System and Fuel EU Maritime (ETS-FEUM) Q&A

EU ETS
The second phase of the EU ETS will begin on January 1st, 2025. As previously communicated, this phase will expand emissions coverage from 40% in 2024 to 70% in 2025, increasing to 100% in 2026.

Fuel EU Maritime
Effective January 1st, 2025, the Fuel EU Maritime regulation will be enforced. This regulation is part of the EU’s ‘Fit for 55’ initiative, targeting a reduction of EU greenhouse gas (GHG) emissions by at least 55% by 2030, See link. It sets limits on the annual average GHG intensity of energy used by ships visiting European ports (EEA countries). These targets will include emissions throughout the full lifecycle of the fuels used onboard, i.e. well to wake. The limit will tighten by 2% as from 2025 until 2030 and after that it will progressively tighten further. 

This regulation encourages the use of renewable, lower-emission fuels and alternative technologies on ships to meet GHG intensity targets, aiming to decarbonize the maritime sector. Eimskip aims to source renewable fuels to meet the upcoming requirement which will increase the energy cost for the vessel operation. Sourcing of renewable fuel will somewhat reduce the purchases of ETS allowances. 

Eimskip's combined fee: ETS/FEUM
To streamline the process for our customers, we are combining the elements of EU ETS and Fuel EU Maritime into a single “ETS/FEUM” fee, simplifying administration for all.

Tariff will be updated monthly in line with the established EU ETS methodology, the monthly average of EU Carbon credit prices will be used to determine tariff. See link  

Eimskip tariff table for 2025 has been published, see below, and tariff for January will be issued in December. Cost of FEUM is about 10% of the combined fee in 2025.

2025 rate per TEU

Committed to fight global warming the European Union (EU) has introduced a system aimed at reaching carbon neutral by 2050. The EU ETS, or Emissions Trading System, is a system were operators in certain industries need to purchase and submit EU Allowances (EUA’s) for each ton of CO2 emissions reported under the scope of the system. As from 1.1.2024, EU ETS was extended to shipping, as an incentive to reduce the industry's carbon footprint and accelerate the use of low-carbon fuels.

The system is introduced with a phase-in period:

• In 2024, companies must submit allowances for 40% of their emissions
• In 2025, companies must submit allowances for 70% of their emissions
• As of 2026 emission allowances are needed for all emissions related to the ETS system

EU ETS applies to all maritime services with at least one call within the EU: 100% of emissions will be considered for legs between 2 EU ports, and 50% of the emissions for legs between EU ports and non-EU ports.

This regulation encourages the use of renewable, lower-emission fuels and alternative technologies on ships to meet GHG intensity targets, aiming to decarbonize the maritime sector. See link

Eimskip aims to source renewable fuels to meet the upcoming requirement which will increase the energy cost for the vessel operation. Sourcing of renewable fuel will somewhat reduce the purchases of ETS allowances.

The cost of compliance is considerable and will keep increase during the full implementation of the programs. Eimskip applied a surcharge for ETS in 2024 and in 2025 a joint surcharge, ETS-FEUM is introduced with the aim of covering cost of compliance.

Pre- and oncarriage by vessels connecting to/from Europe by partner carriers of Eimskip are as well subject to surcharges.

The ETS-FEUM surcharge tariff table is calculated based on the anticipated usage of fossil fuel for Eimskip’s sailing system in 2025. The sailing system has calls between EU ports were 100% of emissions are a part of the system and there are calls between non-EU ports and EU ports at a 50% level. Eimskip surcharge is based on averages and split into the following categories:

• EU to/from Iceland
• US/CA to/from Iceland
• EU to/from Faroes
• Faroes to/from US/CA (via Iceland)
• EU to/from US/CA (via Iceland)

Additional costs for compliance with Fuel EU Maritime in regards to purchase of greener fuel are net calculated against less purchase of ETS allowances and added to the overall calculation of ETS-FEUM. Approximately 10% of tariff is related to Fuel EU Maritime.

Tariff table for various EU Carbon (ETS allowances) unit prices

2024 rate per TEU

2025 rate per TEU

Shipments between Faroes and the UK and shipments between the US and CA are not applicable towards ETS and Fuel EU Maritime and do not carry a ETS-FEUM surcharge.

The current ETS-FEUM tariff of Eimskip can be found at https://www.eimskip.com/tariffs/

The surcharge will fluctuate as it is depending on the price volatility of the carbon allowances traded into the system. The average purchase cost of EUA’s for a 30-day period, from the 16th to -the 15th, is used as the basis for the following month. Example: If the purchase cost of EUA’s is around € 75 then a tariff for a 20ft (one TEU) from a European port to Iceland will be € 33.

The tariff of a month  is based on average EU Carbon credit prices from a previous 30 day period, normally from about the16th to the 15.

Yes, EUA’s are publicly traded and information about prices can be found here.

Eimskip has set the goal of becoming net zero by 2040 and has taken various measures to reduce emissions from the operation. The measures include e.g.:

• A more environmentally friendly and reliable sailing system was implemented in Q1 2024. The new sailing system has the aim of reducing CO2 emissions by 14% compared to previous system. See information here: New sailing system
• Investment in harbor cranes and focus on optimizing terminal operation for swift vessel operation
• Electric shore connection for vessels in Reykjavik
• Preparation for design and new building of vessels that can run on environmentally friendly energy sources 
• Constant monitoring of vessel operation with the aim of optimizing the utilization of energy sources

ETS-FEUM surcharge is a non-negotiable surcharge to cover the cost of compliance.

Yes, the current tariff table is only valid for 2025. A new tariff table will be introduced for 2026 that will be based on the sailing schedule of 2026 and increased purchases of EUA’s. In 2026, Eimskip will have to submit allowances for 100% of emissions under the scope of ETS.

Eimskip ETS-FEUM surcharge is based on a 30-day average of the price of EUA’s so if prices drop then ETS-FEUM surcharge will be adjusted according to the tariff table.