West African piracy continues to be a concern

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

Despite strides made in reporting incidents, spreading better intelligence, increasing military presence and even placing armed guards on vessels—all of which have perhaps contributed to a drop in attacks—pirates are still up to no good offshore, especially offshore Nigeria and Indonesia. Pirates on April 11 kidnapped six Turkish members of a cargo ship’s crew—including the captain, chief officer and chief engineer—offshore Nigeria, Reuters reported, citing a Nigerian navy spokesman. The vessel, M/T PULI, was carrying liquid chemical fuels and was en-route to Cameroon when the attack occurred, the news report said, citing other sources. Other crew members were not harmed. The pirates stole cash, ship’s properties and personal belongings of the crew, according to the International Maritime Bureau (IMB), the division of the International Chamber of Commerce that specializes in fighting maritime crime and malpractice. So far this month there have been several attacks based on data on IMB’s website. Fortunately, not all were successful attacks. Most of these reportedly took place offshore Nigeria. Two happened offshore Indonesia and one offshore Malaysia. High freeboards helped thwart pirates during two separate incidents offshore Nigeria on April 7 and April 10. Both happened southwest of Brass, Nigeria, and involved seven pirates, according to IMB In the April 7 attempt pirates armed with automatic weapons tried to board a drifting tanker that was awaiting cargo loading instructions. Their attempt to board the tanker with an aluminium ladder failed due to the vessel’s high freeboard. In the April 10 incident the pirates fled after seeing security boats approaching. However, pirates managed to escape with the ship’s stores, or items intended to meet the crew’s daily needs such as water, food and safety and medical supplies, during an attack April 1. But two days later “robbers jumped overboard and escaped” empty-handed after being noticed by an alert crew near Jakarta Anchorage, Indonesia, according to IMB. The incidents show that piracy remains a problem for companies. Good news is that more steps are being taken in areas where piracy has been a concern. This includes Nigeria and Equatorial Guinea. In an effort to boost security, the two have agreed to work together to patrol the Gulf of Guinea. “The conclusion and signing of the agreement is expected to enhance security in the Gulf of Guinea and help in curbing maritime crimes such as piracy, crude oil theft, sabotage of oil rigs and arms smuggling,” Garba Shehu, a spokesman for Nigeria’s president, said in a March 16 Reuters news report. Lower commodity prices, layoffs, smaller profits and the search for greater efficiencies and cost-savings may be holding the oil and gas industry’s attention. But companies should find a way to keep eyes on piracy, one of the above-ground risks that never seems to go away.

Source, Velda Addison, Hart Energy

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West African piracy continues to be a concern

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.