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Shipping regulations from 2024 under the EU Emissions Trading System (ETS)
With the 2030 Climate Target Plan, the Commission raised the EU's ambition to reduce greenhouse gas emissions to at least 55% below 1990 levels by 2030.
While maritime transport plays an essential role in the EU economy and is one of the most energy-efficient modes of transport, at EU level, it represents 3 to 4% of the total CO2 emissions. In order to significantly reduce greenhouse gas (GHG) emissions from international shipping, EU implemented a number of legislative regulations.
What does the ETS mean for shipping companies? Starting in 2024, shipping companies operating between ports in the EU/EEA will need to pay annual EU Allowances (EUAs) for greenhouse gases (GHG) emissions. Emissions will be reported and verified by the EU monitoring, which over time will cover more emission types, ship types and sizes.
What is the aim of adding shipping to the EU Emissions Trading System? The Emissions Trading System (ETS) aims to create a financial incentive for shipping companies to reduce their GHG Emissions in accordance with EU’s aim of being climate neutral by 2050 – an economy with net-zero greenhouse gas emissions.
Scope and coverage phases
Vessels ETS will cover commercial ships transporting cargo or passengers* above 5000 gross tonnage (GT).
Routes ETS will cover 100% emissions on voyages between EU/EEA ports and 50% of emissions on voyages between an EU/EEA port and a non-EU/EEA port.
*ETS cost will be split between freight & passenger
What ETS means for our customers
The costs of compliance with ETS are significant and will impact our operations, costs, and contractual agreements.
As with past regulations, we will introduce a surcharge to the market, to cover the increased costs implemented by the EU. Customers will therefore be subject to a standalone surcharge from January 1st, 2024.
FAQs about ETS
As of 1 January 2024, shipping companies will monitor emissions in accordance with the revised monitoring plan that should be assessed by verifiers and approved by the administering authority.
Once per year, shipping companies must submit an emissions report for each of the ships under their responsibility, as well an emissions report at company level. All ship-level and company-level emissions reports must be verified by an accredited verifier by 31 March of the following year.
Once aggregated emissions data at company level have been verified and submitted to the administering authority, shipping companies must surrender the equivalent number of allowances in the Union Registry by 30 September of that year.
No. Shipping companies will need to surrender (use) EU allowances (EUA) corresponding to the amount of aggregated emissions data at the company level to be reported under the EU ETS Directive. Carbon credits or certificates cannot be used for EU ETS compliance purposes.
Shipping companies covered by the EU ETS are required to have an approved monitoring plan for monitoring and reporting annual emissions. Every year, companies must submit an emissions report for each of the ships under their responsibility, as well as an emissions report at the company level (aggregating the ship data to be reported for ETS purposes).
The data for a given year must be verified by shipping companies covered by the EU ETS. Shipping companies are also required to have an approved monitoring plan for monitoring and reporting annual emissions. Every year, companies must submit an emissions report for each of the ship under their responsibility, as well an emissions report at company level (aggregating the ship data to be reported for ETS purposes). The data for a given year must be verified by an accredited verifier by 31 March of the following year (or by 28 February if so requested by the administering authority). Once verified, companies must surrender (use) the equivalent number of allowances by 30 September of that year.
Shipping companies are subject to obligations under the MRV Regulation since 2018. Data must be reported through THETIS-MRV, a platform operated by the European Maritime Safety Agency (EMSA) which enables, among other benefits, the publication of reliable data on ships’ emissions.
The revised EU ETS provides dedicated support to accelerate the decarbonisation of the maritime sector through the Innovation Fund. The Innovation Fund could support a wide diversity of projects and innovative solutions in the maritime sector, across the whole sector, and at scale, including in relation to the production and uptake of renewable and low-carbon fuels.
Besides the Innovation Fund, all auction revenues attributed to EU Member States have to be used for climate-related purposes; and the list of these purposes has been expanded to explicitly cover measures to decarbonise the maritime sector. The list also includes the financing of climate action in vulnerable third countries, including adaptation to the impacts of climate change.
Our ETS model is based on a charge per lane meter as we are selling our capacity on the basis of lane meters. The impact on our consumption and thereby our emission from weight is insignificant. Whether the last trailer on a full vessel is empty or loaded with max weight capacity will not change the bunker consumption at a level that we can even measure.
DFDS decides to follow the industry standard for RoRo activities which currently is reflecting the charge per lane meter.
