APRILE 2023 PAG. 59 - Confitarma analsis EU ETS 2024 Emission Trading System

 

Confitarma held a workshop organised by the young ship owners group, in collaboration with BRS ship brokers group.

The workshop was opened by the president of Confitarma Mario Mattioli and the president of the young ship owners Salvatore De Miko and led by Mattia Ferracchiato head of carbon markets at BRS ship brokers group. The meeting was to look in depth at the characteristics of the European system of exchange of emission ETS, which cover 45% of European emissions and since 2024 will also be included in the maritime sector.

President Mario Mattioli commented “I applaud the initiative of the young ship owners who have confronted a matter such as ETS in a serious,competent and technical manner. Confitarma is looking on with much interest, but also with worry at the development of the application to shipping of this system of taxation. We reiterate the need for exemption for the motorways of the seat lines and for the sea traffic to the islands, including the major islands, not just those with less than 200,000 inhabitants, as we have today”.

Negotiators of the EU commission of Parliament and the Cabinet members have came to a preliminary agreement on the 29th of November 2022 which fully confirms the announcements and the drafts which were drawn up in May in the months before 2024.Ship-owners and charterers must purchase or transfer CO2 permissions forevery ton of gas emitted into the atmosphere during each year.  

Since 2018 ships of over 5000 tons, which call at European Union ports from Norway or Iceland must monitor and advise their emissions of CO2 to the European authorities. From 2024 onwards these vessels will be included in the European system for exchanges of quotas of emissions and must purchase European quotas. 1EUA equals 1 ton of CO2 and must be returned to the member states. Large offshore vessels of more than 5000 tons at the moment are excluded, but must monitor and calculate their emissions from 2022 before being included in ETS from 2027.

Initially, the European Union justified limiting entrance only to ships of over 5000 tons because of administrative costs and small climatic benefit, maintaining that 45% of the ships operating in Europe would have been exempt, but their emissions cover only 10% of all maritime transport. However, in reply to criticism the EU has decided to include also ships up to 400 tons in the monitoring mechanism starting from 2025.  Thereafter a revision of the ETS directive in 2026 will determine if they will adhere to EU ETS.

How does the ETS system function for the maritime sector

In order to guarantee a favourable inclusion of maritime in EU ETS. The restitution of the quotas from shipping companies will gradually increase according to emissions verified and they will have to remit quotas in accordance with 40% declared for 2024, and 70% for 2025 and after 2026, 100%. In addition, ships which leave from ports in the European economic area and arriving in extra-European ports or vice versa will have a reduction of 50%. The intention of this discount is so that 50% of the rest of the remaining 50% emissions will be added to the carbon plan of the extra EU countries. Much talk was made of the extension to the countries outside Italy such as Portugal, Spain and France which have an exclusion for voyages performed from the country of origin to countries outside the European continent. There will also be a temporary exclusion of voyages between islands with less than 200,000 stable residents and this will continue until 2030.

The administrative authorities for each shipping company which monitor and receive CO2 permissions will be the member states in which the shipping company is registered or the member state with the largest number of calls which the company has made in the last four years. A company with no voyages in the last four years will be covered by the administrative authority of the member state in which the ship arrived or began its first departure.