News - Inclusion of the maritime sector in the EU ETS
The Maritime sector has been proposed to be covered by the European Emission Trading System (EU ETS). The proposal is still under negotiation. On this site we will bring information about how it is expected that the Maritime sector will be implemented in the EU ETS.
Be aware that since the proposal still is being negotiated there will be adjustments to the directive proposal. More details on requirements etc. will be flushed out in the resulting Registry Regulation and national implementation. This site will be updated periodically in light of developments.
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The Maritime sector will be incorporated into the European Emission Trading System (EU ETS). In the proposal being negotiated, it is proposed that ships with tonnage over 5.000 will be covered by the EU ETS and that the company which should be covered by the EU ETS, should be either the shipowner or the DOC-holder, cf. the international safety management code, ISM code.
The companies registered in an EU Member State must open compliance accounts in the EU Member State where the company is registered. The companies which are registered outside of the EU but do sail and have port calls in EU Member States, will also be covered by the regulation and will be assigned to a Member State, where the company must open a compliance account.
All the companies registered in Denmark and the countries the EU Commission will assign to Denmark, must open compliance accounts in the Danish part of the EU ETS.
Accounts in the EU ETS registry
The rules for opening compliance accounts have not been determined yet but most likely the Maritime sector will get their own type of compliance account. Otherwise, is expected that the same requirements that apply to the existing types of compliance accounts (operator holding accounts and aircraft operator holding accounts) will apply to the maritime sector in order to open and maintain accounts.
The fee for having a compliance account in the Danish part of the EU ETS will be the same as for the existing compliance accounts.
All companies and individuals, regardless of whether they are covered by EU ETS, can apply to open trading accounts in the EU ETS. The purpose of trading accounts is only to buy and sell emission allowances or voluntarily reduction of greenhouse gas emissions. Trading accounts cannot be used to fulfill obligations to the EU-ETS. However, an account holder of a trading account can choose to buy emission allowances for the purpose of deleting them and by doing so, contribute to the reduction of emission allowances and thereby reduction of CO2-emmission.
Both compliance accounts and trading accounts require at least two account representatives at account opening, who can act on behalf of the account holder (The company) in the EU ETS.
Trading and surrendering of allowances
Once a year, the companies which are covered by EU ETS must surrender emission allowances that correspond to their emission of greenhouse gases in the preceding year. One emission allowance corresponds to emission of one ton of CO2e. The Maritime sector is proposed to be gradually implemented in the EU ETS. Therefor to begin with they will only be obligated to surrender allowances that covers a part of their CO2 emission. It has been proposed that the allowances the Maritime sector needs to surrender will be phased in over a period of 4 years, where the amount, of allowances to be surrendered increases from 20% of the emissions in the first year to 100% of the emission in the 4th year. The deadline for surrendering allowances is the 30th of April every year, and the account representatives are responsible for performing the surrender in the Danish part of the EU ETS registry. The Maritime sector will not get free allowances.
Emission allowances can be traded freely by everyone who has account in the EU ETS, regardless of account type and there are no limits to the volume of a transaction, but it is not possible to transfer more emission allowances than are held in an account. Allowances in the EU ETS are financial instruments, and the market price varies, depending on the market economy.
Emission Allowances can be bought on digital auction platforms and trading markets, which are registered or approved by the EU ETS. Allowances can also be traded between companies or individuals that keep accounts in the EU ETS, regardless of which country the accounts are registered, and the account type.
Account holders must enter into their own agreements concerning price; allowance volume, transaction date, etc., with the party with whom they wish to trade. Financial transactions relating to the purchase and sale of emission allowances take place outside the EU ETS registry and do not have to be notified to the Danish Business Authority. It is only the transfer of the allowances that are performed in the EU ETS registry and no service fee is charged for performing transactions in the EU ETS registry.