Following the extension of the EU Emissions Trading System (ETS) to maritime transport from 1 January 2024, this year will be the first year that shipping companies must surrender allowances covering emissions in 2024.
Each shipping company is assigned to the administering authority of an EU Member State according to rules that have been set out in the EU ETS Directive and implementing legislation, including Commission Implementing Decision (EU) 2024/411 of 30 January 2024.
Shipping companies will often seek to pass on the ETS costs to the charterers of the ship, by incorporating a charterparty clause such as the BIMCO Emission Trading Scheme Allowances Clause for Time Charter Parties. Depending on the terms agreed, a charterer may have to transfer allowances to the owner or pay a cash equivalent based on an agreed pricing mechanism.
We have received a number of queries from members about different ‘types’ of ETS allowances and whether they can receive / transfer / surrender them. The EU FAQ on maritime transport in the ETS states: “Shipping companies need to acquire general EU allowances (EUA), the same ones used by industry, power sector and aircraft operators.”
However, some operators have reported seeing ‘aviation’ EUA’s in their accounts. It can be possible for an operator’s Maritime Operator Holding Account (MOHA)—the account held with the relevant Member State’s administering authority—to show ‘aviation’ EUA’s as distinct to general EUA’s. For a shipping company receiving an ‘aviation’ EUA, the concern has been whether these allowances can be validly surrendered to the administering authority.
After consulting the MRV / ETS Maritime Team at EMSA, we understand that shipping companies can hold and use aviation EUA’s in satisfaction of their obligations under the EU ETS. However, EMSA has provided this advice with the caveat that it does not bind the European Commission or EMSA.
That said, whilst we obviously need to bear in mind the caveats put in place by EMSA, EMSA’s current guidance suggests that there should be no issue in operators who have received such allowances using them to fulfil obligations under the EU ETS, or in satisfaction of obligations under a charterparty clause placing responsibility for EU ETS allowances on the charterer. Typically, charterparty clauses (including the BIMCO Emission Trading Scheme Allowances Clause) do not specify a particular type of EUA to be transferred by the charterer to the owner.
Members who have concerns about the EU ETS and allowances should contact their usual club contacts for further guidance.
Source: North Standard