You are Global Trade

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

Have you ever asked yourself if the marine industry plays a positive role in society? Or if doing your job makes a difference? Do you make a positive contribution? Are you proud of what you do?

We work hard, and it is easy to lose sight of these questions. And yet we know from research that the answers are key to our intrinsic motivation. Intrinsic motivation is what drives us to do things simply for the joy of the activity itself. If that’s work, then we’re in a happy place.

The video above is Edge’s attempt to place the global trade and transportation industry, and the marine insurance segment, in this wider context. Because we enjoy what we do.

The animation has been developed in partnership with KILN Research and exactEarth, and is based on data from Clarksons. It shows every single movement of 51,000 ships in the course of a year, and records shipment volumes (eg. the number of cars transported). It also records the amount of CO2 released into the atmosphere, an issue which is at the forefront of ship design, following emission targets set by the IMO.

Data from all these sources has been combined, with resulting shipping lanes, so we can see how 90% of the goods that sustain our civilisation arrive at their destinations.

Global trade brings peace and prosperity to the world. If you are reading this article you are part of it. Enjoy.

We hope you like the screensaver, which you can download here.

To install as a screensaver follow this procedure:

Download to your pc using link provided
Extract zip file by right clicking “EdgeScreensaver_2017.scr” and choose “Extract All”
Right click the extracted screensaver file “EdgeScreensaver_2017”, choose “Install” (if Windows Defender warns you of a security risk, choose “More info” on the left, and then “Run anyway”)
Select wait period (defaults to 15 minutes)
Click “OK”

You are Global Trade

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.