By Eric Huang.    Photo：Marek Piwnicki

Recently, Maersk, Hapag-Lloyd, and CMA CGM took the lead in announcing the charges imposed to cope with the costs of the European Union Emissions Trading System (EU ETS). The estimated fees for each 20-foot standard cargo container (TEU) range between 7 to 105 euros. It is anticipated that other Shipping lines will progressively follow suit in disclosing their fee structures. Starting from January of the coming year, EU ETS will apply to all vessels traveling to or from the European Union or operating within EU waters.

This emissions trading system will impose annually decreasing permitted emission levels on companies. Companies will monitor their emissions and undergo audits by independent organizations. They will purchase European Union Emission Allowances (EUAs) to cover the costs of their carbon equivalent emissions. By 2024, EU ETS will cover 40% of emissions, rising to 70% by 2025 and reaching 100% a year later. In 2026, nitrogen oxides and methane will also be included in the EU ETS calculations. However, services with origin or destination outside the EU will incur only 50% of the costs, with third countries determining their jurisdiction over carbon emission fees.

Hapag-Lloyd has presented detailed EU ETS levels. According to a spokesperson for the company, "Our customers' EU ETS surcharge is calculated based on the average weighted transport emissions within the sub-relationship, achieved through allocating standardized costs. We use the industry-recognized Clean Cargo emissions calculation method, which is based on standardized roundtrip utilization rates, using average emission factors."

The German operator aims to establish a user-friendly mechanism for customers to determine their emission costs and "clearly indicate the level of the EU ETS surcharge." The EU ETS fees will be recalculated on a quarterly basis.

Hapag-Lloyd's fees fall between dry cargo containers and refrigerated containers. The fees for the Asia to Northern Europe route are 12 euros and 31 euros per standard container, and for East Asia to Southern Europe, the fees are 7 euros and 16 euros, while the Atlantic route incurs fees of 9 euros and 16 euros. For the Europe to Africa route, dry and refrigerated containers will be charged 17 euros and 29 euros, respectively. Hapag-Lloyd also mentions that customers using "Ship Green" can receive discounts of 25%, 50%, or 100%, depending on the service booked.

Maersk also offers a green transportation option called ECO Delivery to reduce its EU ETS surcharge. However, Maersk states that its fees may be higher than those of its German competitors. Maersk's fees for the Far East to Northern Europe are 70 euros and 105 euros per 40-foot standard container (FEU), and the return voyage fees are 46 euros and 69 euros. The North America to Mediterranean route incurs charges of 66 euros and 91 euros, with return voyage fees of 91 euros and 137 euros.

CMA CGM calculates its charges for the Asia to Northern Europe route at 25 euros and 40 euros per standard container using a price of 90 euros per ton of EU emissions. For the Europe to North America route, the charges are 43 euros and 65 euros, respectively.

It is anticipated that all Shipping lines will announce the actual surcharges imposed by the EU ETS at least 30 days before the regulation comes into effect.

The further implementation of the EU ETS could have profound effects on the international logistics industry, especially regarding the relationships between Shipping lines and cargo owners. Firstly, the implementation of EU ETS will result in varying emission costs across different routes and ports, potentially causing fluctuations in the costs and prices of goods transportation. This means that cargo owners will need more complex cost forecasting and planning to ensure the smooth operation of their supply chains.

Furthermore, the billing methods of EU ETS are relatively opaque. Shipping lines must report their emissions by the end of 2024 and then purchase CO2 allowances by September 2025. This uncertainty may make it challenging for market participants to predict and plan for future transport costs. Additionally, the success of Shipping lines is dependent on market conditions, as they may attempt to increase fuel surcharges when fuel prices rise. This could lead to fluctuations in freight rates, further affecting logistics costs.

For the international shipping industry, these changes may result in greater uncertainty, especially in an unpredictable market environment. Shipping lines and cargo owners will require more transparency and collaboration to ensure that their businesses are not adversely affected by this uncertainty. This may necessitate more information sharing and coordination to address the challenges posed by the EU ETS. Therefore, the international logistics industry needs to continuously adjust and adapt to evolving regulations and market conditions.

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