The following is an important update for all importers and exporters operating in the EU.

New carbon taxes will impact companies transporting goods anywhere within, into, or out of the European Economic Area (EEA), effective January 1, 2024. And ocean carriers have announced the implementation of the European Union’s Emissions Trading System (EU ETS) surcharge to cover the costs.

Important to note is that carbon pricing within the EU ETS is calculated based on vessels rather than cargo.

Ship operators must report emissions and allocations for the CO2 generated:

  • 50% of emissions from voyages departing from an EU port to/ from a non-EU port
  • 100% of emissions from voyages between EU ports
  • 100% of emissions from ships docked at an EU port

With the new law adopted, there will be a phased implementation of carbon pricing. Companies must purchase emission allowances equivalent to each metric ton of reported CO2 emissions.

It will be implemented in phases:

  • 2024: companies must submit allowances for 40% of their verified emissions.
  • 2025: companies must submit allowances for 70% of their verified emissions.
  • 2026 onward: companies must submit allowances for all their verified emissions.

Carriers expect volatility of the European Union Allowance (EUA) traded in ETS and may increase due to supply and demand factors. This will likely lead to the surcharge being updated every quarter to align with the changes.

You can read more on the European Commission website: https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en

Please contact Jaguar Freight with any questions or concerns.