News / Evergreen unveils ETS surcharge estimate – Hapag still cheapest

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Evergreen has become the latest carrier to release its EU emissions trading system (ETS) fuel surcharge estimates, with its prices sitting at the upper-middle of an increasingly varied spectrum.  

The Taiwanese carrier follows Maersk, CMA CGM, MSC, Hapag- Lloyd and ONE in its indications of surcharges to cover the forthcoming EU ETS, which are set out in the table below (click to enlarge).

Source: carriers

These cover the three major east-west trades that service the EU – it is worth noting, however, that Maersk’s figures relate to per feu charging, while all the other carriers opted for teu.  

While this table illustrates the diverse potential rates across carriers, it shows the industry is starting to put together a picture of what the surcharge will cost. 

Albrecht Grell, co-MD of OceanScore, today calculated that if the ETS surcharge was applicable to 2022, the 126m tonnes of CO2 released in maritime emissions from voyages to, from and between European ports would result in the need for 82.7m EU Allowances (EUAs) or carbon credits. This would cost €6.5bn, based on the current price of €78 per EUA for a tonne of CO2. 

Mr Grell said: “The overall cost will be largely dictated by the EUA price that historically has proven highly volatile. While it has dropped to €78 in recent weeks, the price is set to be driven upwards over time, due to high demand and an annual 4.3% reduction in the number of available allowances under the cap-and-trade system.” 

On the evidence so far, Hapag-Lloyd’s surcharge estimates seem far cheaper than its peers. However, a spokesperson for the German carrier explained to The Loadstar: “The EU ETS surcharge calculation for our customers is based on shipment emissions per subrelation, achieved by distributing standardised cost.

“We use the industry-proven Clean Cargo Emission Calculation Methodology, which works with average emission factors based on a standardised utilisation round-trip.” 

The spokesperson added that these surcharges were just indications and “will be adjusted on a quarterly basis to cover market price fluctuations of the EUAs as well as changes in the emissions per subrelation due to higher or lower fuel consumption profiles”.  

ONE also recently released its EU ETS surcharge estimates, the second-lowest after Hapag- Lloyd, and said its surcharge tariff assumption was based on 40% of the reported CO2 being charged. 

But it added that its estimation was subject to change and that the actual surcharge tariff would be announced “prior to actual implementation”.  This would be refreshed every quarter by referring to the December Future Price of the EUA price tracker, sourced by ICE, as one of the benchmarks. 

Meanwhile, rumours continue in shipping circles that other jurisdictions are considering similar regulations. One industry source told The Loadstar: “There are many more countries about to introduce similar emission trading systems … I believe a colleague mentioned the US and Japan to be the next countries to follow, plus many more have plans to do it.” 

However, the International Chamber of Shipping (ICS) told The Loadstar it was not currently aware of any other proposals for emission trading systems, but added “a piecemeal approach to carbon pricing which emulates the unilateral approach taken by the EU remains a concern”. 

It explained: “This is why the ICS is focused on working with the International Maritime Organization (IMO) to agree a global GHG pricing mechanism for international shipping, which, as part of the ambitious 2023 GHG Strategy adopted by IMO member states in July this year, the IMO has agreed to do by 2025.” 

From 1 January, shipping companies must declare their carbon output for routes to and from Europe, then purchase EUAs that correspond with their carbon emissions from the previous year. Initially, this will only be for 40% of emissions, but will rise to 100% by 2026.