What has been decided?
The EU has agreed to gradually include shipping in the EU ETS during a three-year phase in period:
- 2024: 40%* of emissions must be paid in 2025
- 2025: 70%* of emissions must be paid in 2026
- 2026: 100%* of emissions must be paid in 2027
* Based on emissions recorded in the EU Monitoring, Reporting and Verification system (EU MRV)
Starting in 2024, allowances will have to be surrendered latest by September 30th in the following year.
The regulation applies to all freight and passenger vessels above 5,000GT and from 2027, offshore vessels above 5,000GT will also be included. For intra EU voyages, 100% of the emissions must be covered by allowances, and for voyages with a start or an end outside of the EU, 50% of the emissions must be covered. In 2026, the EU ETS will be expanded to include Methane (CH4) and Nitrous Oxide (N2O), consequently impacting the price of burning LNG.