As of January 1st 2024 EU Emission Trading System (ETS) will be implemented for all vessels over 5,000 gross tonnage. All vessel operators and/or vessel owners will be obligated to purchase and return to authorities, emission allowances relating to their greenhouse gas emissions from shipping. Eimskip will implement an ETS surcharge effective from the same time.
The implementation of ETS will be in three phases:
- 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
Eimskip has set the ambitious goal of achieving net zero emissions by 2040 and has achieved good results in recent years with increased efficiency and economy of scale in its sailing system. Actions have been taken that directly aim to reduce bunker consumption and carbon emissions, thus reducing the inevitable financial impact that ETS has on the operating cost of the sailing system. As result, the estimated cost of purchasing emission allowances in 2024 is significantly lower than it would have been if the measures in had not been taken. The measures include e.g.:
- A more environmentally friendly and reliable sailing system introduced in November. The new sailing system will reduce CO2 emissions by 14% compared to the system in 2022. 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 newbuilding of vessels that can run on environmentally friendly energy sources
Constant monitoring of vessel operation with the aim of optimizing utilization of energy sources
Despite these efforts, Eimskip foresees considerable cost of purchases of ETS credits in 2024 and the cost will continue to increase with the scaling up of ETS until fully implemented in 2026. Therefore, Eimskip will implement the ETS surcharge, valid as of January 1st 2024. The surcharge will be updated and published monthly in line with price development of EU Carbon permits. Development of permit prices can be found on websites like: EU Carbon permits.
Eimskip will continue to seek all possible ways to optimize and reduce the environmental impact of the sailing system and thereby reduce the Company’s need for emission allowances.
ETS TARIFF TABLE 2024
Tariff table of 2024 is based on the new and environmentally friendly sailing system and takes into account price development of emission allowances. Eimskip will publish its monthly tariff in due time before the start of each month and publish on its website. In the tariff table below, an example is taken if the average price of emission allowances would be € 70 per ton.
Click here to view the ETS Tariff table.
Further information is available on the Company’s website www.eimskip.com/ets.