This week marked a special occasion which may have gone unnoticed to many active in shipping.
It is widely known that ships emit greenhouse gases and that, without further action, by 2050 shipping emissions may rise by 30% from their 2008 levels. The EU decided to take matters into its own hands, and have revised its climate, energy and transport legislation under the “Fit for 55” package. The proposed reforms include several shipping measures, ranging from a sustainable fuel mandate within the EU to the inclusion of maritime emissions in the Emissions Trading Scheme (ETS).
Also, as part of the EU plan, shipping emissions enter the ETS from 2023. When the measure comes into force, shipowners, regardless of the flag they fly, will have to buy carbon allowances to cover all emissions during voyages in the EU and half of those generated by international voyages that start or finish at an EU port. In 2023, companies chartering vessels will be required to purchase allowances for 20% of their emissions from ships that call at EU ports, growing to 100% by 2026.
As a result, we now see Carbon Permits increase in price, as can be seen in below overview. And recently, the price of permits on the European Union's carbon market has hit 100 euros per tonne for the first time.
This is truly a milestone that reflects the increased costs that emitters must pay when they emit.
This is another incentive to reduce emissions from shipping, as the more emitters have to pay for EU carbon permits to cover each tonne of C02 they produce, the greater the incentive to invest in low carbon fuels and boost vessel and voyage efficiency.
With the increasing demand for allowances, the carbon pricing may further increase. One of the best ways shipping companies can remain competitive with EU carbon price by taking measures, such as investing in energy efficiency and low-carbon technologies to reduce their fuel consumption and emissions.
Start with monitoring your fleet, and use the performance data to benchmark individual vessels and identifying which vessels are having a strong impact on your total emissions. By identifying these underperforming vessels, you can focus on improving their performance.
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