CUSTOMER ADVISORY:  Carriers implement EU ETS surcharge

22 December 2023

As of 1 January 2024, shipping will be included in the European Union Emissions Trading Scheme (EU ETS), which sets an annual absolute limit on emissions of certain greenhouse gases (GHG) and requires the purchase of allowances for emissions.

As of 1 January 2024, shipping will be included in the European Union Emissions Trading Scheme (EU ETS), which sets an annual absolute limit on emissions of certain greenhouse gases (GHG) and requires the purchase of allowances for emissions. The additional cost incurred to comply with the EU ETS directive will be applied to bookings under the EU ETS scope as a standalone surcharge, known as ‘Emissions surcharge’. 

What is EU ETS? 

The EU Emissions Trading System (ETS) was initially established in 2005 as a market-based mechanism to tackle greenhouse gas emissions within the European Union. While it primarily targeted energy-intensive sectors like power generation and manufacturing, regulators have recently decided to include shipping in the EU ETS. As of 2024, the ETS will encompass shipping activities within the European Economic Area (EEA), consisting of EU Member States, Iceland, Liechtenstein, and Norway. As a result of this, shipping companies will be required to monitor and report their emissions and surrender allowances for every ton of CO2e they emit. For every 1 ton of reported CO2e, 1 European Union Allowance (EUA) must be purchased and submitted to the EU each year. Despite the UK no longer being a member of the EEA, most carriers have decided to include the UK in the scope of the fee. 

How much is the surcharge? 

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