Tag Archives: european union

EU ETS at a glance

I found this article very informative. It’s from Bureau Veritas, a classification society based in the EU.

It makes very clear how the EU’s emissions trading system (ETS) will work for the maritime industry. It’s part of the Fit for 55 package that aims to reduce emissions by maritime and other sectors in the EU.

The timeline is very important for shipowners and ship charterers. The rules require payments for emission credits, so there will be a financial impact. It remains to be seen how chartering contracts will divide the costs of the credits between shipowners and charterers, but the financial burden will be there.

Most people agree that the emissions trading credit system is an extremely important motivator for participants in the maritime industry to get serious about reducing emissions. We are seeing activity now to reduce emissions, but the pace has to pick up if the EU goals of a 55% reduction by 2030 are to be met. Investment is needed, and internalizing the cost of emissions through the trading of credits is an important lever to use. It’s a good example of a sensible regulation to impel action. More nations should try it.

The FAQ format of the article makes it easy to see the answers.

One unfortunate issue is the somewhat longer time frame for implementation of the ETS; the first bite starts in January 2024, covering 40% of emissions. This escalates to 70% in 2025 and 100% in 2026. Another critique of the system is that for ships that either enter or exit the EU ports fro outside the EU, they only pay for half the emissions. It’s a compromise that is necessary, since nations outside the EU might have their own emissions trading regimes, or none at all. Having it apply only to EU port visits insures more cooperation.

The basis of the trading is an updated MRV plan, which must be kept updated. There will be an accredited verifier of the plan for each fleet owner. The fleet’s individual greenhouse gas (GHG) emissions must be monitored from January 1 of 2025, and a report submitted by March. Then by September, the emissions will be calculated (surrendered, in the words of the document) and the emissions credits purchased on 40% of it.

Penalties include expulsion orders from EU ports, or a flag detention order until obligations are fulfilled, for EU member state flagged ships.

EU Emissions Trading System Directive | Bureau Veritas M&O

EU Emissions Trading System Directive | Bureau Veritas M&O

Europe could end reliance on China for battery production by 2027

Transport and Environment (T&E), “Europe’s leading clean transport campaign group”, has a plan. They believe Europe could be able to produce all the batteries it needs by 2027, without imports from China. It’s a laudable goal, and the idea is amazing since Europe is fast rushing to battery-powered electric vehicles, which consume lots of batteries.

The group imagines a European sovereignty fund to support domestic battery production, and streamlining of EU rules on state aid. Battery plants now take a long time to build, since there are considerable risks to their storage and manufacture.

According to the article, about half of Europe’s batteries are already sourced there. The EU is mandating electric vehicles by 2035, which sets up a big increase in demand for batteries.

The supply chains associated with electric vehicles are interesting and of crucial importance so that they will be accepted and effectively used. Batteries are a major element, and disruptions in the supply are not healthy for European manufacturers.

By Charlie Bartlett, technology editor 24/01/2023

Europe could end reliance on China for battery production by 2027 – The Loadstar

Rapidly plunging Rhine remains supply chain problem

Low water levels in the Rhine River severely impact barge and shipping traffic. The Rhine is one of the most important inland shipping routes in Europe. EU nations have for years now tried to emphasize getting freight traffic off the roads and onto rivers via barge.

One of the most severe impacts is to refineries along the Rhine. They have had to shut down because of lack of supply. That’s bad for Europe, because of the shortage of petroleum fuels due to the Ukraine war.

This map shows the problem.

Source: S&P Global Commodity Insights.

The depth measurements at Kaub, shown in the middle of the map, increased in the last few days due to extensive rain in Switzerland, but remain far below normal levels. There’s not enough water to float some barges that would normally be used for river cargo and petroleum products.

It’s a blow for the EU caused by a natural problem. Is global warming to blame? We don’t know, but cyclical droughts have been known for years, and clearly disrupt our plans. Trucking congestion is rising fast, and is neither as efficient nor as clean as the barge traffic.

John Kingston Friday, August 19, 2022

Rapidly plunging Rhine remains supply chain problem even as some relief looms – FreightWaves