The price of emission allowances fluctuates due to many factors and requires market participants to actively track the market and manage risk. As your partner, we monitor the market and always provide the latest information on market movements.
The EU’s legislative bodies have agreed that shipping industry will be included in the EU Emissions Trading System (EU ETS) from 2024. This will cause high added costs for shipping companies. We at Gasum assist you in adapting to the new regulation, predict allowance pricing and mitigate price risks concerning the allowance purchases.
The EU Emissions Trading System is a cornerstone in the EU’s climate policy. The European Union sets an overall limit or "cap" on the amount of greenhouse gases that can be emitted by the participating industries. This cap is gradually reduced over time to meet the EU's climate targets.
Participants can sell their excess allowances or buy more allowances to meet their emissions. This creates a market for allowances, with the price of an allowance being determined by supply and demand. The EU ETS allowance market has been volatile during its existence.
From 2024 onwards, shipping companies will have to purchase and surrender EU ETS emission allowances for each ton of reported CO2 emissions in the scope of the system. For example, the additional costs related to allowances for a mid-sized RoPax actor can be even up to 15 million euros* annually.
EU ETS will impact the shipping companies gradually, since actors will initially have to surrender allowances for a portion of their emissions during an initial phase-in period, reaching 100% after 3 years:
The EU ETS will be applied to all cargo vessels and passenger ships over 5,000 GT (gross tonnage). The scope of emissions trading in internal routes and port calls within EU/EEA is 100 % of emissions and 50 % for voyages starting or ending outside the EU.
Emission trading requires expertise since EU ETS is a polical and volatile market. Trading in it demands resources to follow the market and factors affecting it. Gasum Portfolio Services provides its customers the access to the secondary market and helps making sound allowance purchasing decisions.
It is both cost-effective and sensible for companies to outsource their emission trading. Gasum has dedicated specialists who track the market for the customers and know when it is the best time to trade. This lets customers concentrate on their core business. Gasum's portfolio management team has tens of years of experience in emission trading and they can tailor a solution that suits customer's needs.
*when allowance price 100€/ton of CO2 for a shipping company with 20 000t LNG and 30 000t MGO annual fuel consumption