Shipping’s EU ETS bill could reach over €8 billion in 2026, Hecla warns

Hecla Emissions Management, a company founded by Wilhelmsen Ship Management (WSM) and Affinity Shipping, has revealed its data that the maritime sector could be liable for €8.4 billion in 2026, taking into account the total ETS-applicable emissions.

The European Union’s Monitoring, Reporting and Verification (EU MRV) regulation requires all ships exceeding 5,000 gross tons to collect and report data on CO2 emissions released to and from EU and EEA ports and will serve as the basis for shipping’s inclusion in the EU Emissions Trading System (ETS) from 1 January 2024.

The data show some significant year-on-year changes from 2021 despite the shipping industry as a whole showing a modest reduction in emissions.

According to the data, total ETS-applicable emissions for the maritime industry amounted to 83.4 million metric tonnes of CO₂ equivalent (tCO₂e) in 2022, a modest decrease of 0.22% from 2021. At the current market value of €90 per emissions allowance (EUA), shipping emissions carried a total worth of €7.5 billion for the year.

Taking into account the ETS phase-in period covering 40% of emissions in 2024, 70% in 2025 and 100% in 2026, and utilizing the forward curve in EUAs, the estimates indicate that the shipping industry could be liable for €3.1 billion in 2024, €5.7 billion in 2025 and €8.4 billion in 2026, according to Hecla.

Furthermore, the data showed emissions decrease across multiple shipping segments, including tankers, container ships, general cargo ships, reefers, Ro-Ros and chemical tankers. The container sector showed the largest reduction, falling by 8.95% equating to 2.3 million metric tonnes of CO₂ equivalent (tCO₂e) saved, the firm highlighted.

However, passenger ships and LNG carriers logged substantial increases. The former scored highest, with a staggering 118% year-on-year rise equating to 2.8 million (tCO₂e), the latter recording a 63% increase equating to 2.1 million tCO₂e.

“The projected liabilities emphasize the importance of shipping companies preparing for their entry into the ETS. We have been onboarding customers from across shipping’s value chain in order to have them fully prepared by the start of next year. We encourage more shipping companies to do the same,” said Hugo Wilson, Director of Hecla Emissions Management.