Scenario 1: Maritime compliance costs are no longer confined to regional regulation. Based on current policy timelines and market assumptions, the industry’s annual compliance bill could rise from around USD 2.7 billion in 2024 to more than USD 57 billion by 2032, with the IMO framework becoming the largest driver of future cost exposure.
The full storyThe outcome of the latest International Maritime Organisation (IMO) meeting, MEPC 78, shows that progress is being made on GHG matters. EEXI, CII and SEEMP guidelines were finalized, and the Mediterranean Sea will be considered a Sulphur emission control area (SECA). However, no decision regarding zero emissions target in 2050 was taken at this point.
Deleting shipping’s phase-in period in the EU ETS would lead to a fivefold rise in carbon cost in the initial year. It will be a steep learning curve for commercial decision-makers who are influenced by carbon exposure. The added carbon cost to a commonly traded intra-EU tanker route would go from USD 14 000 to USD 70 000. This is a new type of exposure that the industry needs to get familiar with, says Siglar CEO Sigmund Kyvik.
EU Parliament committee suggests a basket of amendments to speed up shipping’s inclusion to the EU Emissions Trading System (ETS). Suggestions include deleting the phase-in period and extending the geographical scope of the scheme while allowing shipowners to pass on the carbon cost to the charterer. This is good news for frontrunners and for the commercial decarbonisation of shipping.
