The EU carbon taxation scheme (ETS) took effect from January 2024. A tax must be paid for CO2 emissions for ships calling EU ports. A ship sailing between two EU ports must pay carbon tax for the full duration of the journey, while a ship sailing between a non-EU port and an EU port needs to pay carbon tax for 50% of the journey. The EU is only requiring 40% payment of the ETS tax in 2024, ramping up to 70% in 2025, and 100% from 2026.
There is however a “loophole” in the ETS, courtesy of the UK’s withdrawal from the EU. This means that the UK port calls can count as first/last port call before an EU port. For example, if a vessel goes from New York to Antwerp, the carrier needs to report the emissions for 50% of the journey, as it goes from a non-EU port to an EU port. However, if the same carrier has a port call in Felixstowe in between New York and Antwerp, the carrier needs to pay zero ETS from New York to Felixstowe, as these are both non-EU ports, and ETS of 50% of the very short journey from Felixstowe to Antwerp.
BREXIT has resulted in the reduction of total reportable sailing distance on the North Atlantic of -24%.
The 2M alliance gain the smallest amount of benefit with their current service network, likely impacting their cost competitiveness in this regard.
