How to achieve EU ETS compliance

To ensure EU ETS compliance, it is crucial to have accurate emissions data, a point that BW Epic Kosan global head of operations Captain Anand Mannath underscored is important as much for ensuring sustainable operations for shipowners as it is for avoiding regulatory penalties.

"Monitoring, reporting and verifying emissions data is not just a regulatory requirement but a cornerstone of sustainable maritime operations," Captain Mannath said, highlighting the importance of best practices for data accuracy. 

Managing EU Allowances (EUAs) is another critical aspect of compliance, and zero44 GmbH co-founder and managing director Friederike Hesse provided detailed insights into the responsibilities and strategies involved in buying and surrendering EUAs.

Ms Hesse noted, "The management of EUAs is complex and requires a strategic approach to optimise costs." She explained the mechanisms of EUA procurement, highlighting the importance of timely acquisition and surrender to avoid financial penalties.

Ms Hesse observed "the majority of the market is still in what we call ’a wait and see’ position," reflecting the uncertainty and cautious approach prevalent in the industry.

For the cost conscious, Mr Wewerinke-Singh noted the importance of accessing the primary market for EU allowances. "If you want to access the primary market of the EU options, that’s where you can get EUA cheapest. I cannot emphasise that enough."

"All the broking channels will have a lot of overheads. If you have access to the primary market, that is where the EUA is cheaper at any given day."

The impact of EU ETS on charter and voyage contracts cannot be understated either, according to Varuna Marine Services director Sanjeev Wewerinke-Singh. Mr Wewerinke-Singh provided an in-depth analysis of the legal and operational challenges posed by the new regulations.

"Charter and voyage contracts must be carefully adapted to reflect the cost implications of EU ETS," he explained.

Mr Wewerinke-Singh advised shipowners and charterers to proactively address these changes to mitigate risk, offering practical insights into contract adaptation and risk management, and underscoring the need for clear contractual clauses to allocate EU ETS-related costs effectively.

StormGeo solution sales manager Roni Kwan also addressed the importance of choosing a system that is adaptable to change, such as a new fuel or a new commercial partner operating on a different platform.

In terms of cost minimisation strategies, Captain Mannath said "Efficiency is key to minimising the financial impact of EU ETS", advocating for the adoption of energy-efficient technologies and practices.

Ms Hesse stressed the role of strategic planning in cost reduction, stating, "Proactive management and early action can significantly lower compliance expenses."

Mr Wewerinke-Singh and Mr Kwan echoed these sentiments, highlighting the importance of leveraging technological advancements and innovative approaches to achieve cost savings.