EMEA News
EU-ETS Costs Jump as Phase-In of Regulations Steps Up in 2025
EU-ETS compliance costs for ships operating in Europe have jumped at the start of 2025 as the phasing-in of the regulation steps up according to its planned trajectory.
Shipping joined the EU ETS at the start of 2024, needing to buy allowances for 100% of emissions generated on intra-EU voyages and 50% of the emissions on voyages between the EU and elsewhere.
But the regulation was phased in, meaning ships would only need to surrender 40% of the required allowances for 2024, 70% for 2025 and 100% from 2026 onwards.
Using the front-month ICE EUA futures closing price from December 31, the increased requirement this year means EUA procurement added $164.02 per mt consumed of VLSFO on intra-EU voyages on January 1, compared to $93.73/mtVLSFO the previous day, according to data compiled by Ship & Bunker.
On average, last year EUAs added $90.69/mtVLSFO to intra-EU VLSFO consumption costs.
With an average EMEA VLSFO price of $597.50/mt on December 31 and $596.50/mt on January 1, EUA procurement can be seen to have added 15.7% to VLSFO consumption costs at the end of 2024, versus 27.5% at the start of 2025.
The change can be expected to make a significant impact on the fuel and emissions bills of the largest shipping companies. Container line AP Moller-Maersk paid $55 million for EUA procurement in the third quarter of last year, or 3.1% of its total bunker costs.
Hapag-Lloyd paid EUR 63.1 million for EUA procurement for the first nine months of 2024, or 3.3% of its total bunker costs.
The first deadline for surrendering EUA allowances for 2024 consumption comes up in September of this year. EUA prices may rise close to that date if the shipping industry rushes to procure all of its allowances at the same time in the run-up to the deadline.
