Navigating the Seas of Change: The Inclusion of Shipping in the EU ETS and Its Impact on Shippers


The shipping industry has recently experienced a transformative change. As of January 1, 2024, shipping activities have been integrated into the European Union's Emissions Trading System (EU ETS), a landmark move in Europe’s ambitious climate action plan. In this blog, we'll delve into how this inclusion works and its potential impacts on the shipping sector. 

Understanding the EU ETS and the Inclusion of Shipping 

What is the EU ETS? | The EU ETS, established in 2005, is the cornerstone of the European Union’s policy to combat climate change. It's the world’s first major carbon market and remains the largest one. The system operates on a 'cap-and-trade' principle, where a cap is set on the total amount of certain greenhouse gases that can be emitted by factories, power plants, and other installations. Participants in the system receive or purchase emission allowances, which they can trade with one another as needed. 

How Does Shipping Fit into the EU ETS? | As of January 1, 2024, shipping activities have been incorporated into the EU ETS. This integration is significant because it brings a substantial source of greenhouse gas emissions under a regulated mechanism for the first time in the EU. The inclusion covers emissions from large ships (over 5,000 gross tonnage) for voyages within the EU, plus 50% of emissions from international voyages starting or ending in EU ports. Additionally, emissions while ships are at berth in EU ports are also included. 

Impact on Shippers 

Increased Costs and Compliance Burden | One of the most immediate effects will be the rise in operational costs. Shipping companies will need to acquire emission allowances for their CO2 emissions, leading to additional expenses. This could increase the cost of shipping goods to and from the EU, potentially affecting global trade patterns. 

Market Dynamics and Competitive Landscape | The new regulation may reshape market dynamics. Companies with newer, more efficient fleets could gain a competitive advantage. In contrast, operators with older, less efficient vessels might face significant challenges. This could lead to market consolidation or push some players out of the market. 

Route and Operational Adjustments | Shipping companies might alter their routes and operational strategies to minimize the financial impact. This could include shorter port stays, slower sailing speeds, and rerouting to other ports when necessary.  

Knowing the location of a shipment, the estimated time of arrival (ETA), and delayed arrival period from the original schedule through monitoring and tracking systems can better help decision-makers to quickly make informed decisions regarding cargo disposition. 

Conclusion | The inclusion of shipping in the EU ETS is an important moment for the maritime industry. It presents both challenges and opportunities, heralding a new era of environmental stewardship and innovation. As the industry adapts to this change, the focus will be on balancing economic realities with the urgent need for climate action. The journey ahead is complex, but with collaborative effort and strategic planning and new technologies, the shipping sector can successfully navigate these new waters towards a sustainable future. 

March 19 2024
Category: Blog,Other

Author: Jim Krachenfels

As a member of the DeltaTrak marketing team, Jim has been a leading blogger on the DeltaTrak product line and cold chain. He has extensive technology marketing experience and an MBA in Marketing.

Visit Jim Krachenfels's profile

 

  • DeltaTrak’s Real Time Loggers have been a game changer for our trucking program. Having the ability to monitor temperature while trucks are in transit has given us peace of mind knowing the quality of our product has not been compromised. The alert notifications, light sensors, and GPS tracking are just some of the great features that have allowed us to make pro active decisions that have strengthened the integrity of our product. The FlashTrak Cloud Service is easy to use and is a great tool to compare and analyze data. The FlashTrak App is super convenient as well. We have used other reliable DeltaTrak products for many years and we were excited to see these added to their lineup!

    Michelle Oetjens
    Senior Global Logistics Analyst-BFP
    Ball Horticultural Company

  • When it comes to making sense of data (in the supply chain) we have found a partner in DeltaTrak. The fact that I could recharge the real-time logger and the dual batteries made a lot of sense to me. It was user friendly and easy to use. With the uncertainty and complexity of today's supply chain, having an effective chain of custody system is not only a clever idea, but a requirement for effective handling of perishable goods.

    Henry Helms
    CEO
    CH Logistics, Cape Town, South Africa

  • It is my pleasure to recommend DeltaTrak to your company. During these times of crisis, we were fortunate to work with DeltaTrak to source top of the line Non-Contact forehead thermometers and PPE supplies at a real market price.

    As a healthcare organization, we are a common target for price gouging and abusive practices from several vendors. With DeltaTrak, we found a partner that understands our needs and who always provide world class customer service.

    Luis Landgrave
    Procurement Manager
    Plum Healthcare Group LLC

  • Dear Fred, I would like express my appreciation for the good business relationship we have had during 2018. The excellent work of Mr. Jorge Hurtado has given me the confidence to continue maintaining our commercial relationship with the DeltaTrak brand.

    Mr. Jorge Hurtado's customer service efforts are outstanding, especially in finding solutions to the challenges that may arise in the commercial process. In my opinion Mr. Hurtado's professionalism is a model for any company, especially when the client is thousands of kilometers away from Modesto, CA. I look forward to strengthening our successful relationship into 2019.

    Valentin Bobadilla
    Valentin Bobadilla Centurion E.I.R.L.

  • We received the blankets yesterday and the quality was/is outstanding. Thank you for getting us a superior product, both our flowers and our customers thank you. :)

    Clint C.
    Aladdin's Floral

  • We have provided our trucks with your recorders for Walmart/Sam's and have not had any issues at all. Great recorders, small in size and easy to activate and place in the truck.

    Diego Calderon
    Delano Farms Company

  • Thank you Juan Solorzano for paying us a business call 4 years ago. The DeltaTrak brand is the majority of our Temp Recorder business. ALL our Walmart/Sam's orders carry the DeltaTrak Temp recorders for the past 4 years without a single problem with any Walmart DC. When you have a load of 18 different orders on a single truck and temp recorders on each order, WOW what a savings your DeltaTrak brand has save us. Yes, Walmart has accepted the DeltaTrak Model with no problems.

    Tony Contreras
    The Giumarra Companies, Reedley Cold Storage

  • This upcoming fall will mark our 4th full season using DeltaTrak recorders. They are competitively priced and the customer service is always exceptional. We have never had a customer issue with one of their units and we don’t expect to. We use a wide range of DeltaTrak products and we have been more than happy with every one of them.

    Bruce Densten
    Little Bear Produce