EU ETS surcharge explorer
Explore how EU ETS surcharges vary across carriers and trade lanes, how it compares with Lune’s own estimates, and get the answers to your EU ETS questions below. Carrier surcharge data from CMA CGM, COSCO, Evergreen, Hapag-Lloyd, MSC, ONE. Last updated March 2024.Asia to Mediterranean
Asia to Mediterranean, 1 TEU
Vessel | Carrier surcharge | Lune estimate | Difference |
|---|---|---|---|
 EVER Top | € 23.00 | € 18.57 | 124 % |
 CGA CGM Galapagos | € 20.00 | € 10.18 | 196 % |
 COSCO Nebula | € 19.00 | € 8.94 | 213 % |
The EVER Top is in service between East Asia and the Mediterranean, via The Cape due to the Red Sea crisis.
Our estimate includes 50% of CO₂ emissions produced between Singapore and Piraeus, plus 100% emissions between Piraeus and Genoa, as required by ETS.
The takeaway
Carriers overcharge 2–3×: every carrier charges more than the EU ETS surcharge should be, according to Lune’s estimates.
Charging €5–20 extra per TEU seems marginal, especially considering the total cost of the shipment. However, it adds up!
For example:
- COSCO Hope @ 13,000 TEU capacity: €440,700 profit
- CMA CGA Galapagos @15,000 TEU capacity: €147,300 profit
- MSC Fiammetta @ 5,760 TEU capacity: €58,060 profit
This may not be fully profiteering, but the carriers may also be adding a buffer to account for administrative work, EUA price fluctuations (which can be high), or simply applying a different calculation method (e.g. charging for 100% of emissions instead of the 40% required by the EU ETS).
FAQs
What is the EU Emissions Trading System (EU ETS)?
What is the EU Emissions Trading System (EU ETS)?
The EU ETS (EU Emissions Trading System) is not a new scheme. The 'cap and trade' system was set up in 2005, with the goal to combat climate change by reducing greenhouse gas emissions (GHG). Before, the policy only covered electricity and heat generation, energy intensive sections such as oil refineries, steel works, and the production of iron, aluminum, glass etc. But as of January 2024, the EU ETS now includes maritime transport.
Companies affected by this policy must annually report on their emissions through the EU MRV (Monitoring, Reporting, and Verification) system, and “surrender/use“ purchased ETS allowances (EUAs) to cover these emissions.
Effectively, it’s a tax. The aim is to make producing emissions more expensive. Thus, incentivising rapid decarbonisation.
Companies affected by this policy must annually report on their emissions through the EU MRV (Monitoring, Reporting, and Verification) system, and “surrender/use“ purchased ETS allowances (EUAs) to cover these emissions.
Effectively, it’s a tax. The aim is to make producing emissions more expensive. Thus, incentivising rapid decarbonisation.
What are European Union Allowances (EUAs)?
What are European Union Allowances (EUAs)?
EUAs are a type of carbon allowance: companies affected by the EU ETS will be charged for the amount of CO₂e they emit. EUAs can be bought and sold on the market, and the variable market price of EUAs reflects the cost of reducing emissions.
I've already offset my emissions, will they still need to be covered by EUAs?
I've already offset my emissions, will they still need to be covered by EUAs?
Yes. The EU ETS regulation does not take into account voluntary carbon offsetting. Regardless of whether a company has chosen to voluntarily offset their emissions or not, they must still pay for enough EUAs to cover the cost of the emissions.
Does the EU ETS include maritime shipping?
Does the EU ETS include maritime shipping?
Yes, the EU ETS applies to maritime transport. Over time, the scope of shipments covered by the EU ETS will grow.
As of 2024, carriers will need to report on and pay the allowances to cover the CO₂ emissions for:
As of 2024, carriers will need to report on and pay the allowances to cover the CO₂ emissions for:
- Cargo and passenger ships of or above 5000 gross tonnage (GT)
- 100% of the emissions from intra-EU maritime voyages
- 100% of emissions from ships at berth in EU ports
- 50% of emissions from voyages which start or end at EU ports, where the other destination is outside of the EU
Who's responsible for reporting emissions and surrendering allowances?
Who's responsible for reporting emissions and surrendering allowances?
Carriers are responsible for measuring and disclosing their overall emissions. They are also responsible for surrendering EUAs to cover the cost of these emissions.
Learn more.
Learn more.
What are EU ETS surcharges?
What are EU ETS surcharges?
Carriers have decided to pass on the cost of purchasing EUAs to shippers in the form of a ‘surcharge‘. These surcharges are not imposed by the EU.
It’s important to note that each ‘surcharge‘ is created by individual carriers. Meaning how they calculate the charge, or even the form a surcharge might take can vary from carrier to carrier. For example, some carriers may decide to cover the cost through carbon insetting, bio-fuel shipments, or other alternatives.
It’s important to note that each ‘surcharge‘ is created by individual carriers. Meaning how they calculate the charge, or even the form a surcharge might take can vary from carrier to carrier. For example, some carriers may decide to cover the cost through carbon insetting, bio-fuel shipments, or other alternatives.
How do carriers calculate the EU ETS surcharge?
How do carriers calculate the EU ETS surcharge?
The EU ETS asks carriers to surrender one EUA for each tonne of CO₂e they emit, therefore you could calculate the fixed cost per shipment by:
CO₂ Emissions per TEU × EUAs price
However, the reality is not that simple.
CO₂ Emissions per TEU × EUAs price
However, the reality is not that simple.
- Carriers collect surcharges before the shipment has taken place, when the shipment emissions aren’t known yet
- EUA price fluctuates over time
- Carriers bear admin costs for reporting emissions to the EU ETS
How does Lune estimate the ETS cost incurred by carriers?
How does Lune estimate the ETS cost incurred by carriers?
Lune uses its emission calculation technology to provide estimates on the cost the carriers would incur for a given shipment under the EU ETS rules for 2024:
- We calculate the emissions of each vessel for shipping 1 TEU on each route displayed above
- We only consider 40% of CO₂ emissions, and ignore other GHG gases
- We consider whether one or both ports are within the EEA (50% or 100% emissions considered)
- We multiply the emissions by the 2023 EUA average price of € 80 / tCO₂e
How will the EU ETS scheme change in the future?
How will the EU ETS scheme change in the future?
As the scheme evolves, the total amount of maritime emissions that will need to be covered by EUAs will grow, thus increasing demand for these allowances. For example, as shown in the table below, 70% of emissions will need to be covered by EUAs in 2025, and in 2026 methane and nitrous oxide will also fall under the scope of the EU ETS.
The price of EUAs is expected to increase in the long-term, particularly as the EU reduces supply to reflect the greater cost of emitting. In economic terms, greater demand and smaller supply means higher prices. Unless fleets are rapidly decarbonised, shippers could expect surcharge prices to hike over the coming years.
Learn more about EUAs.
FAQ – Maritime transport in EU Emissions Trading System (ETS)
The price of EUAs is expected to increase in the long-term, particularly as the EU reduces supply to reflect the greater cost of emitting. In economic terms, greater demand and smaller supply means higher prices. Unless fleets are rapidly decarbonised, shippers could expect surcharge prices to hike over the coming years.
Learn more about EUAs.
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