The International Transport Intermediaries Club (ITIC) expects a substantial financial impact, potentially reaching billions, on the shipping industry due to the European Union’s (EU) forthcoming Emissions Trading Scheme (ETS).
Scheduled to be enforced from 1 January 2024, the extended EU ETS will impose an annual absolute limit on greenhouse gas (GHG) emissions for vessels with a gross tonnage (gt) of 5,000 and above when calling at European Union ports.
However, its implementation is triggering tensions between shipowners and charterers, particularly related to the language within charter agreements aimed at ensuring an equitable distribution of costs and managing legal risks.
Amidst these challenges, Robert Hodge, General Manager at ITIC, emphasises the crucial necessity for ship managers to conduct thorough due diligence, ensuring effective mitigation of these risks.
ITIC’s cautionary message follows the recent gathering of BIMCO’s documentary committee , a forum including ITIC and other major shipping stakeholders. Notably, during this meeting, BIMCO took a groundbreaking step by adopting an ETS allowances clause within its ship management agreement, SHIPMAN.
Additionally, three tailored ETS clauses designed for voyage charter parties were introduced. These clauses are strategically crafted to ease compliance with the evolving regulations, providing a forward-looking approach to addressing the dynamic landscape of carbon emissions in the maritime industry.
In its capacity as an advisor on the BIMCO document committee, ITIC is poised to conduct a webinar aimed at advising its members on potential challenges and offering comprehensive guidance to ship managers at large.
The webinar, titled ‘EU ETS – Ship Managers, are you ready?’ will be hosted by Robert Hodge and will delve into crucial topics such as risks associated with the scheme, an in-depth overview of the ETS clause, and actionable steps ship managers should take to safeguard their interests.
According to a statement, the EU ETS comes as a result of the increasing regulatory landscape imposed by the International Maritime Organization (IMO) and the European Union when it comes to reducing GHG for vessels transiting European waters and docking at European ports. The most recent updates to the BIMCO SHIPMAN Emission Trading Scheme Allowances Clause 2023 ensure that the costs and responsibilities for obtaining, transferring and surrendering emission allowances for ships operating under an emission scheme in a ship management context.