The shipping industry will be included in the EU's Emissions Trading System (ETS) from January 1 next year. The inclusion of an ETS would not only affect transport costs to and from the EU, but would have a range of implications for carriers and shippers worldwide, and could put upward pressure on the pricing of goods that do not touch the EU at all. "
The emissions trading system is part of the "Fit for 55" plan to implement Europe's "Green Deal" climate law, with the goal of reducing the continent's net greenhouse gas emissions by 55% from 1990 levels by 2030 and making Europe climate neutral by 2050. Shipping accounts for 13% of Europe's total greenhouse gas emissions.
the EU's carbon tax includes goods in and out of the EU, from the last port of call before arrival in the EU to the first port of call in the EU, ocean carriers will be required to pay a 50% carbon tax, and vice versa. In addition, the airline is responsible for 100 percent of the emissions on any journey between EU ports.
It is understood that the container industry's emissions in 2022 will fall the most, a decline of 8.95, that is, saving 20000 tons of carbon dioxide equivalent.
Some liner services pass through the European Union, such as the Tattoo Steamer's Turkey-America Express (TUX) service, which connects Turkey's three ports with the east coast of the United States, calling at other ports in the Mediterranean along the way. The airline even marketed the TUX loop as "dedicated coverage from Turkey and the Western Mediterranean to the East Coast of the United States".
Although neither Turkey nor the US is part of the EU carbon tax regime. However, since the TUX service, as currently designed, calls several Mediterranean ports in the EU in both directions, it is subject to the following penalties under the EU ETS:
From Istanbul to Piraeus a 50% carbon tax;
from Piraeus to Algeciras with a 100 per cent carbon tax;
from Algeciras to New York with a 50% carbon tax;
from Savannah to Algeciras with a 50% carbon tax;
and from Algeciras to Iskenderun's 50% carbon tax.
Shippers who use this service only to move goods between Turkey and the United States will be required to pay a portion of the EU carbon tax, while the entire round trip is 13000 nautical miles, of which only 1700 nautical miles are exempt from the carbon trading system. 2000 nautical miles will be subject to a 100 per cent tax and 9300 nautical miles will be subject to a 50 per cent tax. In effect, this means that round-trip services will be subject to a 51% EU carbon tax.
There are two ways to avoid this, one is that passing on the full cost of the EU carbon tax to cargo owners who pick up or ship goods in the EU will significantly increase the cost of these shippers and may prompt them to switch to competing services or carriers with more favorable terms; and two avoid calling at all EU ports in rotation, but this will limit the amount of cargo it can carry, leading to a reduction in ship size and an increase in cost per slot.
of the world's largest ships, and the most efficient per TEU, are already deployed in the EU trade. But the biggest impact will be on smaller ships. A significant portion of the small fleet is quite old and therefore relatively inefficient. There will be a strong incentive to move older regional and feeder vessels out of the EU in favor of newer vessels currently deployed on other trade routes. "
The global effect of the EU emissions trading system will be relatively slow, partly because the EU carbon tax is phased in, with an implementation rate of 40% in 2024, 70% in 2025 and full implementation starting in 2026. In addition, reconfiguring the operator network and redeploying the vessel will require time and money, and the vessel will need to be released from the charter before the transfer.
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