- Cap and trade initiative covers carbon emitters, gradually reducing allowances over time.
- The responsibility for ETS compliance primarily falls to the shipowner.
- The shipowner can transfer ETS obligations by providing a jointly signed document.
Implementation and Coverage
As of January 1, 2024, vessels over 5,000 GT within EU waters fall under the EU’s Emission Trading System (ETS). This “cap and trade” initiative covers carbon emitters, gradually reducing allowances over time. The scheme applies to voyages within and in/out of the EU, gradually increasing coverage from 40% in 2024 to 100% by 2026, reports Gard.
Clarification of Compliance Responsibility
The responsibility for ETS compliance falls on the “shipping company,” which primarily refers to the shipowner or a designated organization/person assuming operational duties. However, recent regulations reaffirm the shipowner’s ultimate responsibility unless an express agreement transfers ETS obligations to another party meeting specified criteria.
Transfer of Responsibility Process
The shipowner can transfer ETS obligations by providing a jointly signed document with the designated shipping company to the Administering Authority. This document must specify key details and ship-related information, ensuring clear accountability and compliance.
Uncertainties and Pending Issues
Certain aspects remain unclear. There’s ambiguity about the duration of the mandate, whether it can have an expiry date or automatically revert to the shipowner. Additionally, the process for notifying changes in responsibility to the Administering Authority and managing disputes among involved parties lacks clarity, potentially causing concerns for mandated shipping companies.
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Source: Gard
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