- The maritime sector faces the world’s first carbon price on shipping starting from this year, introduced through the extended EU Emissions Trading System (EU ETS) effective January 1, 2024.
- The EU ETS imposes an annual absolute emission limit on greenhouse gases (GHG) for vessels of 5,000 gt and above calling at EU ports, aiming to cover shipping industry emissions and promote sustainability.
- Lloyd’s Register’s ‘Shipping and Fit for 55’ report highlights the importance of deploying fleets efficiently along specific routes, paired with informed fuel and technology choices, crucial for compliance with new EU regulations.
- The report suggests that ensuring efficient vessels are routed to trades serving the European Economic Area (EEA) ports can minimize exposure to carbon pricing and contribute to the EU’s emission reduction targets.
Efficient Fleet Deployment And Carbon Pricing
A recent report from Lloyd’s Register emphasizes that efficient fleet deployment along designated routes, coupled with informed fuel and technology selections, will play a pivotal role in navigating the upcoming EU regulations.
Since the beginning of this year, the maritime sector has been subject to the world’s first carbon price on shipping.
The extended EU Emissions Trading System (EU ETS), which came into force on January 1, 2024, sets an annual absolute limit on emissions of greenhouse gases (GHG) for vessels of 5,000 gt and above calling at EU ports. The introduction of a carbon tax seeks to cover the shipping industry’s emissions and encourage more sustainable practices.
Strategies for Emission Reduction In Shipping
The ‘Shipping and Fit for 55’ report, which offers insights for owners, operators, managers, and charterers shaping their strategies to address shipping’s first emissions pricing mechanism, found that ensuring efficient vessels are routed to trades serving the European Economic Area (EEA) ports is a significant step that operators can take to minimize exposure to carbon pricing and to contribute to the EU’s emission reduction targets.
However, the guide shows that using such vessels will be easier in some shipping segments than others due to the nature of their deployment, trade or commercial factors. There will also be a knock-on impact on chartering markets as those in Europe seek more efficient vessels.
The report stresses how important it is for operators to understand how to account for emissions from different fuels. Under the two regulations, early adopters of zero or near-zero carbon fuels and wind-assisted propulsion will have a significant advantage in their emissions accounting compared with those using traditional fuels.
Navigating Carbon Trading
Purchasing EU Allowances (EUA) or carbon certificates, will also be a new function for shipowners and operators. With the requirement to buy and sell emissions allowances under EU ETS representing a first step into carbon trading for many owners, several factors will affect when to purchase and how allowance exposure should be factored into business decisions.
The report outlines that if shipowners do not purchase EUAs at the correct time, they could be forced into buying these at an inflated price, conversely, purchasing EUAs too early can result in them losing value and companies may not be able to recoup their initial investment.
“The Shipping and Fit for 55 reports provides members of the maritime value chain with a comprehensive guide, helping operators and owners identify the scope for optimizing compliance by exploring the operational decisions they can take and how they are impacted by the regulations. Highlighting choices and implications in key areas, such as routing and decarbonization technology will help owners, operators, and charterers understand where they can find opportunities amidst the complexity of the new regulatory landscape,” David Lloyd, Programme Director – Energy Transition, Lloyd’s Register, said.
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: offshore-energy
As a fellow blogger, I can appreciate the time and effort that goes into creating well-crafted posts You are doing an amazing job
You have a way of making each of your readers feel seen and heard That’s a special quality that not all bloggers possess Thank you for creating a safe space for us
As a fellow blogger, I can appreciate the time and effort that goes into creating well-crafted posts You are doing an amazing job
I simply could not go away your web site prior to suggesting that I really enjoyed the standard info a person supply on your guests? Is going to be back incessantly to investigate cross-check new posts.
Normally I do not read article on blogs, however I would like to say that this write-up very forced me to try and do so! Your writing style has been amazed me. Thanks, quite great post.