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EU ETS Calculation Logic & Latest Developments
EU ETS Calculation Logic & Latest developments
Dear Valued Customer,
Thank you for your continued support and for choosing Ocean Network Express (ONE) to cater to your needs.
Effective January 1st, 2024, the maritime transportation industry was incorporated into the European Union Emission Trading System (EU ETS), please consult our notice dated October 30, 2023 for further details. Ocean Network Express (ONE) implemented an EU ETS surcharge starting from January 1st, 2024 until further notice. The EU ETS Surcharge rate is subject to quarterly assessments, and any modifications will be notified in advance. This will be applicable to both existing and new contracts that have started on or after January 1st, 2024. The following details ONE’s Surcharge Tariff & Calculation Logic, EU ETS Latest developments, which is scheduled to be implemented starting January 1st, 2024.
< EU ETS Surcharge Tariff Simulation Matrix (USD) >
*Above matrix serves as a reference only.
* The latest EU ETS quantum is released on a quarterly basis. For additional information, please consult the customer advisory on the ONE portal.
< ETS Tariff Calculation Logic >
a) Basic Concept : ETS = (EU Allowance Price × CO2 Emission) / Lifting + Reefer Premium (for reefer only).
b) EU Allowance Price : The EU Allowance Price is determined by the balance of supply and demand in major trading houses such as EEX, ICE, and ECX. We will be referring to the ICE Market Price as one of the benchmarks.
c) Reefer Premium : Additional cost is considered on the top of Dry (non reefer) tariff based on additional bunker consumption of live reefer containers for its temperature control, which is calculated per container.
d) Port Pair Concept : ETS Surcharge shall be applied if either origin or destination port is an EU port (excluding UK ports).
e) Tariff & Calculation Logic Refreshment : Every quarter.
f) Trade Categorization : 13 categories based on the services we provide our customers.
< Base Assumptions for above >
a) 40% of the CO2 emission needs to be purchased to comply with EU ETS as a full implementation stage for 2024.
In 2025, 70% of CO2 emission needs to be purchased to comply with EU ETS.
In 2026, 100% of CO2 emission equivalent needs to be purchased to comply with EU ETS.
b) 100% of CO2 emitted between EU ports/ 50% of CO2 emitted between EU ports and Non EU port sailing will be charged.
From 2026, 100% of CO2 equivalent emitted between EU ports/ 50% of CO2 equivalent emitted between EU ports and Non EU port sailing will be charged.
c) Based on the assumption to implement the same charge to all EU area related cargoes.
*Note: CO2 equivalent emissions include the Greenhouse Gas warming effect of other emissions such as CH4 (Methane) & NO2 (Nitrogen dioxide).
We would like to take this opportunity to thank you for supporting ONE and look forward to continuously serving your global transportation needs.
Should you have any questions, please do not hesitate to contact your ONE representative.
Yours faithfully,
Ocean Network Express Pte. Ltd.