It has been determined that since the European Union (EU) implemented the Emission Trading System (ETS) for ships on January 1 of last year, the financial burden on domestic shipping companies has increased by tens of billions of won annually.
The EU ETS is a system that requires vessels of 5,000 tons or more entering and leaving ports within the region to purchase emission allowances based on the amount of greenhouse gases they emit. Among domestic shipping companies, HMM, which operates scheduled container ships, has shown a significant burden.
According to the shipping industry on the 16th, HMM's emission provision liability for the first quarter of this year has been estimated at 37 billion won. The emission provision liability is an estimate of the amount expected to be spent in the future, using fuel consumption and the market price of carbon allowances according to the EU ETS.
Until the first quarter of last year when the EU ETS was implemented, HMM did not estimate this liability, but it steadily increased starting from 11.9 billion won in the second quarter, 18 billion won in the third quarter, and 26.4 billion won in the fourth quarter.
Bulk shipping companies that do not operate scheduled services or relatively smaller vessels have also seen an increase in their burdens. Pan Ocean's emission provision liability for the first quarter of this year is 5.6 billion won, nearly a 70% increase compared to 3.4 billion won at the end of the fourth quarter of last year. Pan Ocean's total emission provision liability for last year was around 5.9 billion won.
Korea Line Corporation has set its emission provision liability at 1.1 billion won for the first quarter of this year. Including unlisted shipping companies that do not disclose their details, the overall cost burden on the domestic shipping industry due to the EU ETS is expected to be even greater.
The British shipping research agency Clarkson estimates that the burden on the global shipping industry will increase by 11 trillion won annually due to the implementation of the EU ETS.
Shipping companies are responding by imposing surcharges on cargo owners and introducing eco-friendly vessels. In the case of HMM, a surcharge of 16 euros per emission trading transaction per TEU (one 6-meter container) is being applied for cargo bound for Northern Europe from Asia.