EU Emissions Trading System on Ocean Shipping

Rotterdam, 19 December 2023 – As of January 1, 2024, the European Union’s Emissions Trading System (ETS) will encompass shipping activities within the European Economic Area. As a result, ship operators will be required to report their emissions and surrender allowances for every ton of CO2 they emit.

What is EU ETS?

The ETS is the cornerstone of the EU's environmental policy, established as the world's first and largest greenhouse gas emissions trading scheme. It plays a pivotal role in the EU's efforts to combat climate change and reduce carbon emissions. Consequently, transporting products by ship within, or in and out of the EU will lead to carbon pricing, as ship operators will need to purchase allowances for the fuel burned during the voyage.

How does it affect Logistics?

Alongside introducing carbon pricing for vessels traveling between EU countries, the law also has extraterritorial application. This means that if a vessel sails between an EU port and a non-EU port, 50% of the emissions from the voyage will be subject to the EU ETS.

Shipping companies are obligated to purchase allowances for the following emissions:

  • 50% of emissions from voyages departing from an EU port to a non-EU port.
  • 50% of emissions from voyages departing from a non-EU port to an EU port.
  • 100% of emissions from voyages between EU ports.
  • 100% of emissions from ships docked at an EU port.

With the new law adopted, there will be a phased implementation of carbon pricing. Shipping companies will be required to submit allowances equivalent to a portion of their emissions, 40% in 2024, 70% in 2025 and in full afterwards.

EU ETS and Den Hartogh

Royal Den Hartogh Logistics recognizes the critical role of environmental sustainability in the logistics sector. We are committed to reducing our CO2 intensity per ton-kilometre by 25% by 2025 and achieving climate neutrality by 2050. The inclusion of shipping in the ETS is a major milestone, reducing greenhouse gas emissions and promoting a transition to more sustainable practices. The cost of compliance is expected to be significant, and may result in adjustment of our service rates where relevant.

Market Outlook

We will monitor the EU ETS surcharge trend closely and will inform our customers pro-actively when significant changes in the EU ETS occur. If you would like to learn more or have questions, we advise you to contact your Den Hartogh Logistics Commercial manager or use the links below.

Learn more about the EU ETS