FernettiImplementation of European Union Carbon Emission Limits and Emission Trading System (ETS) Rules as of January 1, 2024
Dear Customers,
As you may well know, both the United Nations (UN) and the European Union (EU) have established and implemented various regulations to limit carbon emissions. Within this framework, the EU has committed to achieving a 55% reduction in carbon emissions by 2030, returning to 1990 emission levels, and becoming the first carbon-neutral continent by 2050. A series of rules and practices that closely affect the maritime sector have been determined within the targets set in 2013 and agreed upon in 2021.
It is anticipated that the reflection of the carbon emission limits, which have been determined by the EU for all sectors and aim to restrict carbon emissions over the years, will largely occur in the maritime sector through the inclusion of maritime sector emissions in the EU Emission Trading System (ETS). The EU Emission Trading System aims to expand its scope to include the CO2 emissions of large vessels (5,000 gross tons and above) irrespective of their flags. This expansion will include all emissions originating from ships during voyages that call at EU ports and for journeys within the EU (intra-EU). It will also cover 50% of emissions resulting from voyages that begin or end outside the EU (extra-EU voyages). In addition to limiting maritime transport emissions as part of the overall ETS quota, this system aims to create a price signal that encourages improvements in energy efficiency and low-carbon solutions. It also aims to reduce the price gap between alternative fuels and traditional maritime fuels.
According to the current ETS policies, the Carbon Tax within the scope of the ETS will be paid to the European Union, based on the amount of carbon emitted by our ships operating between Turkey and Europe, which is directly related to their fuel consumption. The calculation of the amount to be paid will take into account the current carbon tax rate, which is around 95 EUR per metric ton of carbon. Therefore, starting from January 1, 2024, our ship freight rates will include a carbon tax fee. In order to reduce our carbon emissions and minimize the accrual of the tax, we are considering ships to take early voyages and undertake longer voyage durations.
In this regard, we would like to inform you that as DFDS, we closely monitor all developments related to this matter, and as a result of these decisions, our sailings to EU ports starting from 2024 will be affected by the implementation of these measures. We would also like to announce that one year after the implementation of these regulations, at the beginning of 2025, international land logistics with arrivals and departures in the EU will also be included in the scope, encompassing the maritime sector. Throughout the year, we will provide our customers with information regarding the economic implications of these regulations on our industry and all EU rules that will have practical application.
Best regards,
DFDS Mediterranean Business Unit
Further information on EU carbon emission measures and the ETS: