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Container shipping to bear brunt of EU Emissions Trading System

Container shipping will be the hardest hit shipping sector in January when the European Union Emissions Trading System (EU ETS) goes live with the carriers liable for around €1.82 billion in carbon charges at today’s prices, by 2026.

The EU ETS will be introduced gradually from 2024, with carriers liable for 40% of emissions in the first year, rising to 70% in 2025 and 100% by 2026, and Albrecht Grell, MD at OceanScore said the bill for the EU ETS will total around €6.5 billion, depending on the cost of EU Allowances (EUAs), calculated using today’s fleet deployments.

Moreover, Grell, speaking at the launch of tech start-up OceanScore, responding diplomatically to questions regarding a global market-based measure (MBM) said, “I do not believe that the framework at the IMO is sufficiently large enough for a global MBM to be accepted by the nation states.”

More likely, according to Grell is the proliferation of regional MBM measures with all the challenges that will create for both shipping, which will have to navigate multiple regulations, and the regulators, who will need to decide who profits from the carbon charges and where the boundaries lie for each jurisdiction.

Container shipping lines have said that the charges levied from the EU ETS will be passed on to shippers and forwarders, with Evergreen announcing charges of €27/dry container and €41/reefer on the Asia to Europe trades. Similar charges will be levied by most other lines.

However, the EU ETS will create another accounting clerical management requirement for the lines and Grell was in London to outline a possible solution for the carriers to manage the new regulatory requirements.

OceanScore is a one-stop automated system for dealing with payment of EUAs and managing the EU ETS, although Grell acknowledges that there will always be manual inputting of a limited amount of the data, mainly due to the access requirements to the Union Registry, where EUAs are acquired.

According to Grell, a number of functions around the EU ETS remain to be clarified, including which facilities are considered transshipment ports, thereby clarifying the last port of call for EU ETS purposes and who is liable for buying the EUAs, the owner or ship manager, while many charters have yet to be modified to account for the new regulation.

Moreover, there will be a need for the carriers to take cash payments and buy EUAs, while the responsibility for buying the correct number of EUAs, estimated at 6,000 per vessel per European port call.

Managing the system will require trained and dedicated staff said Grell, putting OceanScore at the forefront of meeting those challenges, which has been recognised by such companies as MSC and vessel owner Peter Döhle.

Matthias Bloete, director of finance, controlling & corporate development at Döhle explained why the company had decided to partner OceanScore, “Although OceanScore is a start-up it has a hugely experienced team with many years of shipping experience, which means that the solution has practical processes and the handling and usability is very good.”

Source: Container News


Cargo Surge Continues at Port of Long Beach

The Port of Long Beach had its best July on record last month as strong consumer demand continues to drive high volumes of cargo across its docks.

Cargo Surge Continues at Port of Long Beach

The port said Thursday that dockworkers and terminals moved 784,845 TEUs in July, a 4.2% increase from its record-setting July 2020 as the economy was bouncing back from COVID-19 economic impacts. July 2020 previously held the record for “best July”.

Imports last month grew 1.6% year-over-year to 382,940 TEUs, while exports decreased 20.7% to 109,951 TEUs. Empties moved out of Long Beach ballooned 22.8%, to 291,955 TEUs.

“Ships arrived last month to move these empty containers out of the harbor and clear valuable terminal space as we handle historic amounts of trade,” said Port of Long Beach Executive Director Mario Cordero. “These boxes are a valuable commodity in the overstressed global supply chain. Our loaded exports are likely to rebound this month.”

With July’s numbers, the Port of Long Beach has broken monthly cargo records in 12 of the last 13 months. Year-to-date through July, the Port of Long Beach has processed 5,538,673 TEUs, a 32.3% increase over the same period in 2020.

The global pandemic continues to impact trade volumes. An outbreak at the Port of Yantian in China delayed some vessels that called at the Port of Long Beach in July. It is likely that increasing COVID-19 cases in Vietnam will disrupt supplies in the months ahead as factories shut down to contain outbreaks of the virus, the Port of Long Beach said.

“Our dockworkers and industry partners have risked their health to keep the gears of our economy turning during this pandemic,” said Long Beach Harbor Commission President Steven Neal. “We thank them, and acknowledge their service as we continue a remarkable run of records at the Port of Long Beach.”

Source: gCaptain