Lockton acquires Edge Group

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

Lockton expands Specialty capabilities and Scandinavian footprint with acquisition of Marine Broker Edge Group

(LONDON) October 2021 – Lockton, the world’s largest independent insurance broker, has entered into an agreement to acquire the Edge Group, with offices in Singapore, Hamburg, London, Copenhagen, Oslo and Bergen, to expand its marine broking capabilities. The acquisition, for an undisclosed fee, is subject to regulatory approval and certain pre-completion conditions.

Edge Group is the largest independent marine broker in the Scandinavian market, with an estimated 2% share of the global marine insurance market. Its acquisition will complement Lockton’s existing marine footprint in the Mediterranean and Singapore and will significantly strengthen its presence in Norway.

The transaction forms a key part of Lockton’s strategy to accelerate its international expansion and demonstrates the business’s ongoing commitment to developing its proposition for clients across Specialty sectors with the addition of territorial and unique product capabilities.

Since the acquisitions of PL Ferrari and Omni, Lockton has seen considerable growth in its Global Marine operations and has attracted some of the best marine broking talent in cities ranging from Hong Kong and Singapore to New Orleans and Miami; a continuing commitment to serve our clients locally, regionally and globally.

Ron Lockton, Executive Chairman of Lockton, Inc. said: “We continue to build Lockton with a clear focus on meeting client needs, preserving the best culture in the industry and perpetuating our private ownership.

This acquisition will deliver value for our clients in the maritime industry by expanding our footprint in an important marine marketplace. More importantly, we’re acquiring a fantastic company and an incredible team with shared beliefs that align with the Lockton culture. We’re thrilled to welcome the Edge team to the Lockton family.”

Alistair Rivers, Global Head of Marine at Lockton, said: “This acquisition builds upon and enhances our Global Marine strategy which has seen us grow significantly over the last five years. We have been able to attract the very best people to serve our clients whilst also growing our client portfolio significantly. The Lockton model differentiates us and this acquisition is a continuation of our commitment to provide the very best service to our clients. We are proud to serve the maritime industry and we see so many opportunities for the future.

Tom Midttun, CEO of Edge Group comments: “As a privately-owned business, Lockton’s independence and family ownership was a key advantage. It allows for long-term business planning, rather than being driven by the quarterly pressures of the financial markets, which we fundamentally believe benefits clients.

“We have built our business on teamwork and promote an open, yet highly professional culture, underpinned by deep specialist knowledge. These shared values with Lockton will enable our partners to continue to add value for our clients while drawing on Lockton’s global resources to deliver the very best results.”

About Lockton:

Lockton is the world’s largest independent insurance brokerage. Our independence empowers our 8,000 Associates doing business in over 125 countries to focus solely on our clients’ risk and insurance needs.

About Edge Group:

Edge Group is a marine specialist insurance broker and project risk consultant with its head office in Bergen.

The company has 80 employees and a 2020 turnover of NOK 156 (USD 18.5) million.

Lockton acquires Edge Group

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.