Edge recognized for its role in creating Singapore War Risks Mutuals and designing new Singapore War Risks Insurance Conditions

The European Union’s Emissions Trading System (EU ETS) was extended to cover emissions from shipping as of 1^st January 2024.

The EU ETS is limited by a 'cap' on the number of emission allowances. Within the cap, companies receive or buy emission allowances, which they can trade as needed. The cap decreases every year, ensuring that total emissions fall.

Each allowance gives the holder the right to emit:

One tonne of carbon dioxide (CO2), or;
The equivalent amount of other powerful greenhouse gases, nitrous oxide (N2O) and perfluorocarbons (PFCs).
The price of one ton of CO2 allowance under the EU ETS has fluctuated between EUR 60 and almost EUR 100 in the past two years. The total cost of emissions will vary based on the cost of the allowance at the time of purchase, the vessel’s emissions profile and the total volume of voyages performed within the EU ETS area. The below is for illustration purposes:
~A 30.000 GT passenger ship has total emissions of 20.000 tonnes in a reporting year, of which 9.000 are within the EU, 7.000 at berth within the EU and 4.000 are between the EU and an outside port. The average price of the allowance is EUR 75 per tonne. The total cost would be as follows:
~~9.000 * EUR 75 = EUR 675.000
~~7.000 * EUR 75 = EUR 525.000
~~4.000 * EUR 75 * 50% = EUR 150.000
~~Total = EUR 1.350.000 (of which 40% is payable in 2024)
For 2024, a 60% rebate is admitted to the vessels involved. However, this is reduced to 30% in 2025, before payment is due for 100% with effect from 2026.
Emissions reporting is done for each individual ship, where the ship submits their data to a verifier (such as a class society) which in turns allows the shipowner to issue a verified company emissions report. This report is then submitted to the administering authority, and it is this data that informs what emission allowances need to be surrendered to the authority.
The sanctions for non- compliance are severe, and in the case of a ship that has failed to comply with the monitoring and reporting obligations for two or more consecutive reporting periods, and where other enforcement measures have failed to ensure compliance, the competent authority of an EEA port of entry may issue an expulsion order. Where such a ship flies the flag of an EEA country and enters or is found in one of its ports, the country concerned will, after giving the opportunity to the company concerned to submit its observations, detain the ship until the company fulfils its monitoring and reporting obligations.
Per the EU’s Implementing Regulation, it is the Shipowner who remains ultimately responsible for complying with the EU ETS system.

There are a number of great resources on the regulatory and practical aspects of the system – none better than the EU’s own:

‍https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02003L0087-20230605

‍https://climate.ec.europa.eu/eu-action/transport/reducing-emissions-shipping-sector_en

‍https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/what-eu-ets_en‍

Singapore Shipping Association held its 23^rd Annual General Meeting on 26 June 2019 at the Marina Mandarin Hotel, in Singapore. At the subsequent cocktail reception Edge was called to the stage and presented with a memento in recognition of the work the group had carried out since the idea of a establishing a Singapore war risks insurer was first discussed in 2012. The memento was presented by Mr. Esben Poulson the SSA’s outgoing President to Tom Midttun, Edge’s CEO.

The initiatives were considered to be strategically important for Singapore to prevent measures that might discourage trade to or from its port or through neighbouring waters.

It was becoming clear that ship owners are sensitive to developments in geo-political climate which is becoming increasingly uncertain. The new insurance conditions hence meets a demand from ship owners for clearer and easier to use conditions. Singapore is a financially strong and politically stable nation state seen by ship owners as a safe haven, and the government support showing strength of purpose in supporting SWRM is seen to of great importance.

Earlier on the same day Edge had worked with the SSA to run a seminar and workshop on the new Singapore War Risks Insurance Conditions, and also to establish a Contract Administration Committee for the new conditions. The turnout was good with every seat taken and a good mixture of shipowners and brokers present. One of the presenters at the seminar was the Information Fusion Centre (IFC) a 24/7 regional MARSEC information-sharing centre. It aims to facilitate information-sharing and collaboration between partners to ensure safety and security at sea. Through integrated team of International Liaison Officers and Republic of Singapore Navy personnel, the IFC delivers information to regional partners to cue timely operational responses. Due to other meetings of the IFC there were 18 nations visiting, so the event was not lacking in military style and appearance as the last developments in the Arabian Gulf and elsewhere were being discussed.

The panellists were, Mr. Nic Wilmot, Special Adviser (Gard), Mr. Nick Fell, Executive Vice President, Corporate Services and General Counsel, (BW Group), Mr. Rama Chandran, Head of Marine, (QBE Insurance (Singapore) Pte Ltd) and Lieutenant Commander Gary Brogan, (International Fusion Centre and British Navy). Edge’s Jens Ringefelt (Senior Broker and Director) moderated the event with good participation from the audience.

The first Contract Administration Committee (drafting committee) consists of:

Gina Lee-Wan (SSA / Chair)

Nicholas Fell (BW Group EVP, Corporate Services & General Counsel)

Irene Lim (PCL Risk Manager)

Rama Chandran (Head of Marine QBE)

Jack Marritiot Smallley (SWRM)

Jens Ringefelt (Edge)

Siti Noriani (SSA)

The Committee is responsible for the onward development of the SWRIC based on its members experience and the changing face of risk, and for suitable revisions.

Edge recognized for its role in creating Singapore War Risks Mutuals and designing new Singapore War Risks Insurance Conditions

The European Union’s Emissions Trading System (EU ETS) was extended to cover emissions from shipping as of 1st January 2024.

The European Union’s Emissions Trading System (EU ETS) was extended to cover emissions from shipping as of 1^st January 2024.