Why will shipping costs rise in 2024?
Transport cost | carbon market | applicable surcharge | European Union
Par Ibrahima DIALLO
28 November 2023 / 14:08

As a direct consequence of the extension of EU emission quotas to shipping, CMA CGM's rates will increase in 2024.

From January 1, 2024, Europe has decided to extend the EU ETS CO2 emissions trading scheme, based on a cap-and-trade system backed by a carbon market, to maritime transport. This decision is in line with the European Green Deal objectives of achieving carbon neutrality by 2050. Initially applied to the most carbon-intensive sectors, the EU ETS will be extended to maritime transport in order to provide an incentive to reduce the sector's environmental impact and accelerate the use of low-carbon fuels.

The EU ETS will apply to all maritime services with at least one call within the EU: 100% of emissions will be taken into account for journeys between 2 EU ports, only 50% for journeys between EU and non-EU ports.

Progressive calendar

From January 1, 2024, shipping companies will be required to report their emissions and purchase an equivalent amount of allowances on the EU ETS market, according to a progressive timetable:

  • By 2024, 40% of declared emissions will have to be converted into allowances.
  • By 2025, 70% of declared emissions will have to be converted into allowances.
  • From 2026, 100% of declared emissions will have to be converted into allowances.

These quota purchases will lead to an increase in shipping rates. CMA CGM is one of the first to announce this, and has issued a press release warning its customers that the additional costs of the EU ETS will lead to a surcharge applicable to all containers loaded by the operator and affected by the regulations.

Tariff increases range from +€9 to +€21 per TEU, depending on destination. The amounts will be revised on a quarterly basis. For the first quarter of 2024, they are based on an average of €80 per tonne of CO2.

RENAUD CHASLE

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