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Here's an update on the EU Emission Trading System (ETS) and Emission Allowance Surcharge

During September, you might have come across our article about the EU Emission Trading System (ETS). In case you did not have the time to read it, here are a few highlights:

The ETS is a key tool of the EU’s policy for reducing greenhouse gas (GHG) emissions. As the world’s first major carbon market, it is part of a series of legislative proposals with the main goal of achieving the EU’s climate neutrality by 2050.

ETS is based on a cap-and-trade system, where the cap limits an entity’s GHG emissions, and within this cap, an entity can buy emission allowances. Shipping companies are expected to give enough allowances to cover all their emissions.

The allowance acquisition will trigger an added cost for shipping companies that will be applied as a separate surcharge for cost recovery purposes to all applicable shipments, including Quick Quotes Spot and contracts. 

As a note, please keep in mind that the EU ETS is not a sustainable product offered by Hapag-Lloyd.

What is new in Hapag-Lloyd's ETS approach?

Further to our update in September 2023, there are a few more details that we would like to share with you.

ETS values will depend on the port-pair combination and applies to all containers where the Port of Load and/or Port of Discharge is located in an EEA (European Economic Area) country.

As an illustrative example, here's a door/port move where a container is picked up from a location in Switzerland for discharge at a port in India.

  • If the container's Port of Loading is in Germany (EEA country), the ETS charge applies
  • If the container's Port of Loading is Türkiye (non-EEA country), the ETS charge does not apply

For your reference, there are currently 30 countries in the European Economic Area (EEA), as listed below:

     
AT - Austria BE – Belgium BG – Bulgaria
HR – Croatia CY – Cyprus CZ – Czech Republic
DK – Denmark EE – Estonia FI – Finland
FR – France DE – Germany GR – Greece
HU – Hungary IC – Iceland IR – Ireland (excl. North Ireland)
IT – Italy LV – Latvia LI – Lichtenstein
LT – Lithuania LU – Luxembourg MT – Malta
NL – Netherlands NO – Norway PL – Poland
PT – Portugal RO – Romania SK – Slovakia
SI – Slovenia ES – Spain SE – Sweden

Note: Due to compliance, all containers loading in China (Hong Kong/Taiwan not included), the ETS surcharge will be added to the ocean freight price instead of an additional surcharge.

 

Please note that the initial proposed surcharge calculation was impacted by earlier assumptions that were found to be overly optimistic, consequently affecting the final surcharge amount.

The EU Emission Trading System surcharge will be in effect from January 1, 2024. Our website's tariff section will be updated quarterly with detailed information on geographies and coverage.

How is this related to your Ship Green shipments*?

If you have already added Ship Green to your quote or shipment with Hapag-Lloyd, you are already avoiding 25, 50 or 100% of the CO2e (CO2 equivalent) emissions. Therefore, we will ensure that we credit 25%, 50%, or 100% of the ETS surcharge in the sea freight invoice of each shipment where Ship Green is active. If you would like to add Ship Green to your shipments, please visit our website here and get started on your green journey.

Please click here if you would like to read more about our Sustainability strategy. If you should have any questions, our teams are ready to assist you at your preferred location.

*China Mainland (PRC) will be out of scope for EU ETS credit application

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