Background

The maritime shipping industry will be included in the EU ETS starting from 2024 and will be phased in during the first three years (40% of ship emissions in 2024, 70% in 2025 and 100% in 2026). Once fully phased in methane and nitrous oxide emissions will be included in the scheme as well. From 2027 offshore service vessels will be added to the scheme. It will be a game changer as this will be the first form of emissions pricing for the sector and creates an incentive for the industry to improve emissions within the fleet.

The UK will most likely follow suit and include the maritime sector into their own national scheme in a similar manner. Meanwhile, the IMO is currently considering various systems of carbon pricing, with an emission trading scheme, feebate and a flat rate being a selection of the proposed solutions.  These new rules will undoubtedly impact the maritime sector and underline the importance of developing a risk management strategy in order to absorb these new costs.

We have also seen an increase in carbon offsetting initiatives within maritime transportation.  Whether it be ‘carbon neutral cargoes’ or addressing their Scope 1,2 & 3 emissions, an increasing number of owners and charterers are focused on their environmental impact. In line with the marine connection, we are seeing considerable interest in blue carbon projects (eg Mangrove and seaweed) in addition to the more common land-based carbon mitigation projects.