Connect with us

Decarbonisation

KPI OceanConnect: EU ETS success depends on preparation and partnership

Jesper Sørensen of KPI OceanConnect explains how even operators that visit the region only occasionally should be well-prepared to deal with EU Emissions Trading System.

Admin

Published

2 years ago

on

Jesper Sørensen of KPI OceanConnect

Jesper Sørensen, Head of Alternative Fuels and Carbon Markets at KPI OceanConnect, looks at the EU Emissions Trading System and explains how even operators that visit the region only occasionally should be well-prepared to deal with the system:

Ships arriving at ports in the European Union (EU) since the start of the year must pay the EU for a portion of the carbon emitted during their voyage under the EU Emissions Trading System (ETS). The EU ETS, which has regulated emissions from European industries, energy producers and aviation for more than a decade, came into effect for shipping vessels over 5000GT on 1st January this year. Owners and operators should rethink how they approach and manage their fuel strategies, with the introduction of the EU ETS meaning they will now need to consider the cost of their carbon emissions. 

The EU ETS regulation is changing the way shipping handles its emissions. Until now, the International Maritime Organization (IMO) focused on operational and technical aspects of existing and future fleets to reduce carbon emissions. Europe’s emissions trading system instead puts a price on carbon and requires owners or operators of vessels that call in EU ports to pay for their emissions. With greenhouse gas emissions linked directly to costs, owners and operators will want to consider emissions trading as they plan and develop their fuel strategies. 

The process of engaging with EU ETS is complex. All vessels visiting EU ports will be familiar with the monitoring, verification and reporting (MRV) standards related to the EU ETS that have been in place since 2018. These MRV standards underpin the compliance process for the EU ETS, providing the data that determines the number of EU Allowances (EUAs) an operator needs to buy and surrender. Less familiar to ship owners and operators will be the entirely new processes of buying, holding and surrendering EUAs. 

Operators subject to EU ETS must register with the Union Registry, the body responsible for guaranteeing accurate accounting for all allowances issued under EU ETS. The Union Registry offers two types of accounts for holding EUAs. The first of which is the Operator Holding Account (OHA) from which operators surrender EUAs to cover their emissions. EUAs can only be surrendered to administering authorities through an OHA. The other type of account is a Trading Account (TA). Any business can open a TA, and it allows them to buy and receive EUAs, whether their activities are subject to the EU ETS or not. EUAs purchased through a TA must be transferred to an OHA for surrendering. 

Both types of accounts are opened with individual countries through the Union Registry. The process for opening accounts is complex, and the information required varies between countries. Opening an account can take several months, so even for irregular visitors to EU ports, it is worth doing this as soon as possible. 

In an open market for carbon credits, operators will want to pay attention to when they buy EUAs and the prices they pay. As operators become more familiar with EU ETS, some may choose to develop more sophisticated fuel strategies, considering the likely cost of any carbon credits they will need to surrender alongside their fuel cost. However, in the first year of operation for EU ETS, we anticipate companies will prioritise compliance and building capacity and experience with the system. 

In February, shipping companies that operate frequently in the EU will learn which country will host their OHA. Operators will be allocated to the country whose ports they visit most often, so they are likely to have a good idea of which country they will be registering with. However, shipping operators whose vessels visit EU ports less frequently will be required to open their OHA in the country of their first European port call in 2024. Given the complexities of registration, operators need to be well prepared to work with the country authorities where their first vessel makes port. 

KPI OceanConnect sees working with clients to handle the demands of the EU ETS as an extension of our partner role in the bunkering industry. Our team has already supported many customers with their EUA questions and transactions. Operators need to think carefully about how they will manage EU ETS and be aware that there is support for covering the many areas of preparation. 

Legal teams should review contracts to make sure it is clear who will be responsible for different aspects of compliance in the value chain. Agreements between technical managers and owners must clearly assign responsibilities, and clauses in contracts between the owner and the charterer and the charterer and the cargo owner need to be clear. 

Internally, shipping companies need to assign responsibility for managing engagement with EU ETS in ways that work best for them. A strategy for buying EUAs when low-carbon fuel is expensive may work for some companies, but it is important to understand which team is responsible for working this out. Internal clarity at this level can make working with the EU ETS easier for shipping companies. 

Ultimately, no matter how many port calls an operator makes in the EU, it is important to ensure compliance. Regardless of any low-carbon fuel buying strategy adopted to minimise exposure to the EU ETS, operators must purchase enough EUAs to cover vessel emissions during the reporting year. If they miscalculate, they will be fined and must still come up with the right number of EUAs. Serious non-compliance may lead to vessels being banned from calling at EU ports.

KPI OceanConnect recognises that marine energy users need to adapt to this complex system and ensure they tailor their fuel strategies to accommodate the new influence of emissions trading. We have long worked in partnership with our suppliers and clients to share knowledge and experience of the bunkering industry. As the shipping industry moves forward to a future that includes carbon trading under EU ETS, partnership and knowledge sharing across the industry will be important for delivering a successful energy transition. 

 

Photo credit: KPI OceanConnect
Published: 13 February, 2024

Related Topics:
Continue Reading

Methanol

World Fuel and partners complete first green methanol bunkering of car carrier in Shanghai

Operation involved the delivery of approximately 2,800 MT of green methanol to “Arctic Tern” via a ship-to-ship transfer using SIPG Energy’s dedicated methanol bunkering vessel “M/V Hai Gang Zhi Yuan”.
Admin

Published

18 hours ago

on

July 22, 2026

By

World Fuel and partners complete first green methanol bunkering of car carrier in Shanghai

Marine fuel provider World Fuel on Tuesday (21 July) said it successfully completed the first green methanol bunkering of M/V Arctic Tern, with EUKOR Car Carriers and SIPG Energy at the Port of Shanghai. 

Arctic Tern is the first vessel in the new Shaper Class series of car carriers. 

The operation involved the delivery of approximately 2,800 MT of green methanol to Arctic Tern via a ship-to-ship transfer using SIPG Energy’s dedicated methanol bunkering vessel M/V Hai Gang Zhi Yuan, the largest vessel of its kind in operation. 

The bunkering operation was carried out at Haitong Terminal, Waigaoqiao Port Area, Shanghai Port, with cargo handling operations conducted simultaneously during bunkering.

This marks EUKOR Car Carriers’ first green methanol operation and the first time Arctic Tern has bunkered methanol since its delivery on 9 July. The operation marked the first bunkering at Shanghai Port of green methanol produced locally in Shanghai for an international PCTC operator. 

It also demonstrated the city’s integrated green methanol value chain, spanning local production, storage and bunkering, and established a replicable “Shanghai Model” for green methanol supply.

World Fuel arranged the supply and delivery of the fuel on behalf of EUKOR Car Carriers, working with SIPG Energy as the physical supplier at the Port of Shanghai.

The green methanol supplied was produced from municipal solid waste, ISCC-EU certified, and had a carbon intensity value below 25 gCO₂e/MJ.

Arctic Tern is the first of fourteen Shaper Class vessels ordered by Wallenius Wilhelmsen. With a capacity of 9,300 car equivalent units and methanol dual-fuel capability, the vessel will be operated by EUKOR Car Carriers, jointly owned by Wallenius Wilhelmsen and Hyundai Motor Group. Following her first green methanol bunkering, Arctic Tern will continue her maiden voyage from Asia to Europe.

Xavier Leroi, COO Shipping Services at Wallenius Wilhelmsen and CEO of EUKOR Car Carriers, said: “Completing Arctic Tern’s first green methanol bunkering shortly after delivery is a significant milestone towards our decarbonisation ambition for both EUKOR Car Carriers and Wallenius Wilhelmsen. It demonstrates how investments in next-generation vessel technology and fuel flexibility are being translated into real-world operations. 

“This achievement reflects the strong collaboration between all parties involved. Together, we have shown how partnerships across the maritime value chain can help make lower-emission fuels available and operationally viable at scale.”

Mark Tamsitt, SVP Global Marine Sales at World Fuel, said, “The first bunkering event with a new fuel is a significant moment for any shipowner, and our role is to make it as seamless as possible. By connecting EUKOR Car Carriers with SIPG Energy’s proven green methanol capability at the Port of Shanghai, we were able to deliver on reliable supply, fuel quality, and safe processes. As more of our customers bring methanol dual-fuel tonnage into service, we are committed to being the partner that makes these kinds of operations routine.”

Mr. Zhang Da, General Manager of SIPG Energy, said, “Welcoming Arctic Tern to the Port of Shanghai for her first green methanol bunkering demonstrates the strength and maturity of our supply capability. Building on our well-established methanol ship-to-ship bunkering services for container vessels, we have already extended such services to pure car and truck carriers (PCTCs). This bunkering sets a new record for the largest single SIMOPs green methanol bunkering for PCTCs in China, marking another step in building Shanghai’s position as a global green energy hub for international shipping.”

This operation follows Wallenius Wilhelmsen’s announcement on 9 July that Arctic Tern would complete her first methanol bunkering shortly after delivery. The vessel entered service on routes between Asia and Europe immediately following handover from China Merchants Jinling Shipyard in Nanjing.

 

Photo credit: World Fuel
Published: 22 July, 2026

Continue Reading

Ammonia

HPA and MB Energy develop safety concept for STS ammonia bunkering

HPA says the Port of Hamburg will become “bunker ready” for ammonia, laying the groundwork for safe and reliable ammonia bunkering in the future.
Admin

Published

18 hours ago

on

July 22, 2026

By

HPA and MB Energy develop safety concept for STS ammonia bunkering

The Hamburg Port Authority (HPA) and integrated energy company MB Energy on Tuesday (21 July) said they have completed a comprehensive risk analysis and developed a dedicated safety concept for ship-to-ship ammonia bunkering.

MB Energy said the analysis lays the groundwork for the safe introduction of ammonia as a future marine fuel.

“With our planned ammonia import terminal in Hamburg-Blumensand, MB Energy intends to provide the reliable land side supply infrastructure needed to support this transition across northern German ports,” it said in a social media post. 

Mabanaft Group was renamed to MB Energy last year and merged over 50 existing brands under one identity. 

Separately, HPA said the Port of Hamburg will become “bunker ready” for ammonia, laying the groundwork for safe and reliable ammonia bunkering in the future.

“The focus is in particular on container ships, cruise ships as well as RoRo and ConRo (Container/RoRo) ships,” it said. 

“We expect ammonia to establish itself as an alternative marine marine fuel in the coming years. With our preparatory work, we are already creating the conditions to welcome the first ammonia-powered ships in Hamburg and to bunker them safely.:

HPA added that the import terminal for ammonia planned by MB Energy from 2029 will make a decisive contribution to ensuring the reliable availability of ammonia as a bunker fuel in northern German ports in the long term. 

“The use of an ammonia bunker barge is considered a possible addition to the landside infrastructure to enable ship bunkering in the port and beyond in the future,” it said.

Related: Mabanaft Group renames as MB Energy, merging over 50 brands under one identity

 

Photo credit: Hamburg Port Authority
Published: 22 July, 2026

Continue Reading

Milestone

GCMD: Project CAPTURED achieves two regulatory milestones for onboard captured CO2

CO2 captured onboard during the project has been formally recognised for compliance under the EU ETS while a proposal submitted to MEPC 84, based on the project, has received IMO’s in-principle support.

Admin

Published

18 hours ago

on

July 22, 2026

By

RESIZED venti views

Global Centre for Maritime Decarbonisation (GCMD) on Wednesday (21 July) said Project CAPTURED has achieved two regulatory milestones that strengthen the commercial case for onboard carbon capture and storage (OCCS).

This comes following its world’s first demonstration of an end-to-end value chain for onboard captured and liquefied CO2 (LCO2).

Completed in June 2025, the pilot showed that CO2 captured onboard a vessel can be offloaded ship-to-ship, transported overland and permanently bound through carbon mineralisation—a process that converts captured CO₂ into stable materials for industrial use.

The CO2 captured onboard during Project CAPTURED has been formally recognised for compliance under the European Union Emissions Trading System (EU ETS). This means the verified tonnage of captured CO2 can be deducted from emissions requiring the surrender of EU Allowances (EUAs).

To qualify for this recognition, the CO2 must be chemically bound permanently in eligible products. Project CAPTURED demonstrated that CO2 captured onboard vessels can meet this requirement through carbon mineralisation.

The data and learnings from the same demonstration formed the basis of a proposal submitted to MEPC 84. This proposal received in-principle support from the International Maritime Organization (IMO) for recognising carbon mineralisation as a form of permanent CO₂ storage.

Complementing geological sequestration, which is already accepted by the IMO, this recognition broadens the downstream options for CO2 captured onboard vessels, and supports the development of maritime carbon value chains. Beyond providing a permanent storage pathway, carbon mineralisation also creates the potential for captured CO2 to serve not only as a waste stream requiring permanent storage, but also as a feedstock for industrial applications through carbon mineralisation, extending emissions reductions beyond the shipping value chain.

Professor Lynn Loo, CEO, GCMD, said, “Project CAPTURED has moved OCCS beyond technical demonstration. The acceptance of the EU ETS deduction gives captured CO₂ a compliance value. At the same time, IMO’s in-principle support for carbon mineralisation will help clarify how captured CO2 can be treated after it leaves the vessel. Together, these milestones turn a pilot into a verified reference case for maritime carbon logistics, one that links regulatory recognition, commercial value and emissions impact.”

 

Photo credit: Venti Views on Unsplash
Published: 22 July, 2026

Continue Reading

Trending