Ships sailing to European ports face a combined carbon emissions bill of $3.6 billion next year
Ships sailing to European ports face a combined carbon emissions bill of $3.6 billion next year, the start of a levy that’s almost certainly going to rise as the continent steps up efforts to combat climate change, according to Bloomberg. The figure is an estimate of the total price of complying with the European Union’s Emissions Trading System from Drewry Shipping Consultants Ltd.
Under the regulation, which takes effect Jan. 1, vessels going into and out of EU ports must pay for their carbon pollution, affecting deliveries of everything from container loads of finished goods to the liquefied natural gas needed to keep homes warm in winter.
In 2024, a container ship sailing between Europe and Asia could incur charges of about €810,000 ($887,000) under the ETS, according to a recent estimate from marine classification society DNV that assumes a carbon price of €90 a ton. Based on Monday’s marine fuel price in northwest Europe, that’s only about 10% of what the same ship’s annual fuel bill would be — meaning swings in the oil price alone could easily outweigh the entire cost of the ETS.
Six EU member states — mainly along the Mediterranean coastline — raised concerns last month that shippers may dodge ETS fees by docking at ports close to, but outside of, the EU.
The costs of complying with the ETS, which applies to European Economic Area as well as EU ports, may for now be relatively small for an industry as big as shipping. But it will almost certainly get more expensive: while shippers only have to cover 40% of their emissions in 2024, that ratchets up to 70% in 2025 and 100% in 2026 — the same year methane and nitrous oxide emissions come under the rules. Using the same assumptions that went into Drewry’s 2024 estimate, which was based on 2022 actual emissions and a price of €100 per ton of CO2, that would generate a total 2026 bill of $9 billion.
