Image Credit: Ship & Bunker

While the global shipping industry is coming to terms with bunker prices almost 50% higher than at the start of the year - and with further rises likely - those in Europe taking in the full cost of bunkers and GHG compliance are seeing a much less steep increase.

Ship & Bunker's G20-VLSFO Index of prices at 20 leading bunkering locations stood at $659/mt on Wednesday, up from $464/mt at the start of the year and with more than half of that price rise emerging in the past few days since US and Israeli strikes on Iran on Saturday.

But this global jump in bunkering prices has been accompanied by a steady decline in EUA prices for EU-ETS compliance since the start of the year.

Shipping firms buying their bunkers at Rotterdam paid $607/mt for VLSFO on Wednesday, an increase of 46.4% from the price on January 1.

But at the same time, the EUA price in dollars has sunk by 16.4% over the same period to $83.78/mtCO2e on Wednesday.

With each tonne of VLSFO consumption on an intra-EU voyage requiring 3.2 EUAs to be surrendered to cover its GHG emissions, that means the cost of bunkers and EU-ETS compliance combined stood at about $875/mt on Wednesday, up by just 18.9% since January 1.

Historically, higher gas prices - and this week's Middle East news has delivered significant surges in this market - lead to higher EUA prices as power generation companies shift to using coal rather than gas where possible, and need more EUAs to cover the emissions generated. But this link has broken down since late last year, and this week so far has seen little overall change in EUA prices.

The EUA market this year has instead been driven by concerns over potential reforms to the ETS, including a possible slower phase-out of free allowances for some industries, leading to the unwinding of speculative long positions that were built at the end of 2025.