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Shipping realizes extra profits thanks to the European marine ETS

The study of Transport & Environment

(sustainabilityenvironment.com) – Italy, along with other European countries bordering on the Mediterranean, fears that the extension of the carbon market to ships in force since 1 January will disadvantage its ports. The navigation companies would be discouraged by the higher costs and could prefer other ports of call, perhaps in North Africa, burying the volumes of traffic in the European ports, completing longer trips and therefore generating still more emissions. This is why Italy, Cyprus, Croatia, Greece, Malta, Portugal and Spain asked the Commission to reconsider at the end of 2023. The reality is quite different. The shipping industry is taking advantage of the maritime ETS to increase earnings. Always landing on European shores.

Companies do have higher costs to bear. The Maritime ETS requires operators to purchase carbon credits for the emissions they generate, just as it does for the other industrial sectors covered by the European carbon market. But they are outsourcing these costs: making European consumers pay for them all, and making more money than before.

It seems that the shipping giants are robbing customers using environmental measures as a way to make customers pay more. Whether it’s a break in the Red Sea or a new carbon price, shipping companies always win. Southern European governments warn that the ETS will cost them business because of ships avoiding their ports, but why should they do so if they profit from it?” , attacks Jacob Armstrong of Transport & Environment.

The marine ETS is the hen from the golden eggs for the shipping

The ngo T&E has published today a relationship that passes to the x-ray the reaction of the marine transport in the first 3 months of application of the marine ETS. From the analysis of 565 completed trips from 20 different ships of the 4 greatest European companies of shipping – MSC, Maersk, Hapag-Lloyd and CMA CGM – towards European ports from 1 January today, it emerges that these subjects recharge prices to carve out an additional profit margin of tens and often even hundreds of thousands of euros for each single trip.

The relationship esteems that Maersk realizes the greater profits, in average, from this “super tax“: approximately 60.000 euros for travel. Then follow MSC (25,000 euros), Hapag Lloyd (23,000 euros) and CMA CGM (14,000 euros). In the worst case, a container ship of Maersk has realized an extra profit of 300 thousand euros with a single trip.

It is not the European maritime ETS that must be changed, therefore, to prevent an increase in emissions due to longer routes to avoid European ports. Other factors – including the partial closure of the Red Sea due to the Houthi attacks from Yemen – weigh much more, also in terms of charging costs to consumers. The study of T&E calculates that the marine ETS affects on 1% of the final cost, while the deviations caused by the war in Palestine arrive to weigh up to 18%.

With economies of scale the maritime transport sector can absorb fairly substantial price shocks. The upheaval of the Red Sea is really serious and global trade has not yet stopped. The ETS is nonsense in comparison. Cost is not an obstacle to the decarbonisation of shipping when more ambitious green measures add only a few cents to most consumer goods”, concludes Armstrong.

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