Container Shipping’s Latest Billion Dollar Problem
Shipping Industry Braces for Billion-Dollar Impact of EU Emissions Trading Scheme (ETS)
The International Transport Intermediaries Club (ITIC) is warning of a potentially massive financial impact on the shipping industry, possibly reaching billions of dollars, due to the European Union’s (EU) forthcoming Emissions Trading Scheme (ETS). Starting on January 1, 2024, the expanded EU ETS will set annual limits on greenhouse gas (GHG) emissions for large ships visiting EU ports.
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However, this implementation is causing disputes between shipowners and charterers, particularly regarding the language in charter agreements aimed at fairly dividing costs and managing legal risks.
Robert Hodge, the General Manager at ITIC, is stressing the importance of ship managers doing thorough research to effectively handle these risks.
ITIC’s warning comes after a recent meeting of BIMCO’s documentary committee, which includes ITIC and other major players in the shipping industry. During this meeting, BIMCO made a significant move by adding an ETS allowances clause to its ship management agreement, SHIPMAN.
Additionally, they introduced three tailored ETS clauses for voyage charter parties. These clauses are designed to make compliance with changing regulations easier and to address the evolving issue of carbon emissions in the maritime sector.
As an advisor on the BIMCO document committee, ITIC is gearing up to host a webinar to guide its members through potential challenges and provide comprehensive advice to ship managers.
According to a statement, the EU ETS is a response to the growing regulatory demands set by the International Maritime Organization (IMO) and the European Union to reduce GHG emissions from ships traveling in European waters and docking at European ports.
Source: Container News
