Navigating Choppy Waters: Challenges For Shipowners Under The EU ETS

• Despite the European Union’s Emission Trading System (EU ETS) taking effect in January, shipowners face challenges in adapting to the new emission regulations.
• Friederike Hesse, MD of Zero44, emphasizes that most companies are unprepared, citing complex issues yet to be resolved.
• The EU ETS mandates shipowners to pay for EU allowances (EUAs) corresponding to their ships’ carbon emissions when calling at EU ports, introducing added administrative complexities.

Adapting to EU ETS Administration: Opening Maritime Operator Holding Accounts (MOHAs)

The EU ETS, active since January 1, requires shipowners to pay for EUAs based on their ships’ carbon emissions. Despite the regulation being in effect, Friederike Hesse, MD of Zero44, highlights the lack of preparedness among companies, pointing to a series of complex issues. Shipowners trading under the EU ETS are mandated to open Maritime Operator Holding Accounts (MOHAs) to transfer and surrender allowances, a process deemed challenging but essential for managing emissions in the long term.

Managing Risks and Ensuring Data Quality: Essential Steps for Shipowners

While the EU ETS introduces challenges, stakeholders like Albrecht Grell of OceanScore advise shipowners to manage risks associated with the volatile EUA prices. Grell emphasizes trading in EUAs rather than cash to avoid potential pitfalls. Additionally, establishing a Union Registry Trading Account (URTA) is crucial for sending and receiving EU allowances, ensuring accurate accounting. Data quality becomes a critical aspect, with annual data verification required for the surrendering party. Despite the complexities, industry experts foresee a settling into routine after the initial administrative work is complete and accounts are operational.

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Source: The Loadstar

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