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Profiteering lines take shippers to the cleaners

Major container carriers are using the European Union Emissions Trading System (EU ETS) to fleece their customers, over-charging for the carbon trading scheme by thousands of euros, according to a leading environmental organisation.

A study by the Brussels-based Transport & Environment (T&E) pressure group analysed 565 journeys taken by 20 vessels to and from Europe operated by Maersk, Hapag-Lloyd, MSC and CMA CGM and found that the lines were charging more than the cost of the EU ETS in 90% of the cases.

Jacob Armstrong, shipping manager at T&E, said, “Shipping giants are ripping off customers by using environmental measures as a way to charge customers more. Whether it’s disruption in the Red Sea or a new carbon price, shipping companies always win.”

According to T&E Southern European governments are warning that carriers will avoid Mediterranean ports in favour of North African, non-EU terminals, costing them business but Armstrong asks, “Why would they if they’re making money from it [the EU ETS]?”

The T&E survey cited an “extreme case” which the group estimated Maersk charged an extra €325,000 in EU ETS levies. And the NGO said that the Danish carrier adds on average around €60,000/voyage, while MSC adds €25,000, CMA CGM €14,000 and Hapag-Lloyd €23,000/voyage.

“While the individual profits for each voyage are not always that high, for carriers with hundreds of vessels this represents millions in surcharge profits every year,” claimed T&E.

Shippers have questioned the ability or desire of some governments to implement carbon charges with the Global Shippers’ Forum (GSF) concerned that the rising costs of shipping will increase costs and ultimately cause inflation, leading to an economic downturn.

“You shouldn’t be decarbonising shipping by throttling demand,” warned GSF MD James Hookham. “This behaviour, if true, is not going to help engender the trust, transparency and truth that’s needed to help get the shipping industry to net zero with the willing support of its customers.”

IMO secretary general Arsenio Dominguez recently told journalists at the MEPC 81 that he is confident that an economic pricing mechanism will be in place by 2027, as mandated by the member states, “but I’m not sure what form it will take”, he conceded.

Shippers, however, are skeptical that the member states have the desire or the ability to police the carriers, with Hookham suggesting that the introduction of a global carbon pricing mechanism will be a green light for carriers to continue operating on fossil fuels, safe in the knowledge that shippers will be forced to pay, opening the way for some 20 years of profiteering by carriers.

“With a global carbon levy moving ahead at IMO there is an increasing likelihood that the switch to zero-carbon fuels in shipping is going to be funded by shippers of goods rather than shareholders and shipowners,” explained Hookham. “Governments must build in the checks and audits to ensure any levy funds raised from customers are used to fund the transition and not to support a share price”.

The EU ETS will only levy charges for 40% of emissions this year, with the charges rising to 70% and 100% of emissions in 2025 and 2026 respectively.

Hookham has voiced concerns that these increases will be a green light to increase the profiteering.

Maersk responded to what it believes is a flawed analysis by T&E. The carrier said it is positive that T&E’s analysis demonstrates there is competition between shipping companies when it comes to EU ETS costs.

However, the Danish company added that T&E analysed selected trades, but its analysis relies on outdated surcharge estimates for these trades.

“These older estimates reflect a higher EUA price, leading to higher costs. This, in turn, leads to the wrong conclusions when compared to the current levels. Newer surcharge estimates are available on Maersk.com and reflect lower EUA prices.”


Mary Ann Evans
Correspondent at Large





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