Business

GARD: The EU Emission Trading System – are you ready?

Since the EU ETS has been agreed, vessel owners and charterers that may trade within the EU should ensure they are prepared to comply with its requirements in 2024.

Published

4 years ago

December 8, 2022

Admin

Maritime protection and indemnity (P&I) club Gard on Wednesday (7 December) published an article discussing on the EU Emission Trading Scheme. The following is an excerpt of the article:

There has been increasing interest in expanding existing domestic emission trading schemes to also cover international shipping. There is now agreement in the EU on how the EU’s emission trading system will be applied to shipping from 2024. Owners and charterers should start to think about how they are going to deal with its requirements.

On a nation state level, governments can impose taxes on the sources of pollution at the point of production or sale. An example is petrol, with the aim that the taxes generated will cover the cost of dealing with the resulting pollution and incentivise reduced consumption. The difficulty in international shipping is that if just a few governments took this approach for bunker fuel, the buyers would likely adjust their arrangements so that they avoided bunkering at the taxed ports. Therefore, for a sales tax on bunker fuel to be effective, governments of all the major bunkering ports around the world would need to coordinate and agree to tax bunker fuel in the same way. With such cooperation looking very unlikely in the near term, and IMO discussion of a carbon tax still in its early stages, governments are now looking at imposing costs on emissions, rather than on fuel at the point of sale.

An emission trading scheme (ETS) is a tool that governments and regulators are expected to use increasingly often in the fight to reduce the pollution created by international shipping. The central idea behind an ETS is to have a market mechanism to ensure that “the polluter pays” – the payment being for the environmental and social cost of pollution, its clean-up cost and potentially also research into technology that will reduce or remove it. Of course, increasing the cost of pollution also creates an incentive to generate less of it.

For this reason, there has been growing interest in expanding existing emission trading schemes to include international shipping, including in the EU, China and Japan. The basic idea of an ETS is that a capped number of emission permits are bought and sold on the market, with emitters having to purchase and surrender enough allowances to cover their emissions. The price of the allowances will change over time to reflect the balance of supply and demand, and emitters then are incentivised to find the cheapest (ie. most efficient) ways to reduce emissions.

The EU Emission Trading Scheme

Launched in 2005, the EU’s Emission Trading System works as a “cap and trade” scheme where emitters of CO2 in certain sectors have to purchase allowances to cover their carbon emissions during the relevant trading period. The number of allowances at any one time are fixed, but they generally reduce each year, so that emissions within the EU also fall.

How the scheme will be applied to shipping has beenunder discussion for some time, but there now seems to be agreement between the European Parliament, the Council of Ministers and the European Commission thatthe key features will be:

Application to all vessels over 5,000 GT trading within EU waters, irrespective of flag
Start date of 1 January 2024 (pushed back from 1 January 2023)
A phased-in implementation, with 40% of emissions covered by the system during 2024, 70% for 2025 and 100% for 2026.
All intra-EU voyage emissions to be covered by the scheme
50% of EU in-bound/out-bound voyage emissions will be covered
The ‘shipping company’ (defined as owner, manager or bareboat charterer) will be responsible for surrendering the allowances
The system will cover carbon dioxide, methane and nitrous oxide
30 April deadline for surrender of allowances for the previous calendar year -for example, 30 April 2025 deadline for 2024 emissions
Non-compliance can lead to penalties and expulsion orders

Several parts of the scheme are still unclear, and questions have been raised about two particular areas relating to shipping. First, in the Special Rapporteur’s report of 24 January 2022, it says that where a ship is on charter and the owner is not responsible for purchasing fuel or making decisions about the vessel’s speed, cargo or route, then:

“… a binding clause should be included in such arrangements for the purpose of passing on the costs so that the entity that is ultimately responsible for the decisions affecting the CO2 emissions of the ship is held accountable for covering the compliance costs paid by the shipping company under this Directive.”

Whilst many vessel owners would support the motivation behind this provision, it is far from clear how EU law would impose such a clause in private contractual arrangements between parties that may not be based in EU states. What happens if the charterparty contains no such clause? Could the owners rely on EU law to seek recovery from the charterers in the EU even if there was no such clause in the charterparty? Might it result in some voyage-charterers being forced to pay for EU ETS allowances even though they did not supply the fuel?

A second area of discussion is how emissions on voyages into or out of the EU are to be determined, and if operators may seek to evade the full application of the EU ETS. For example, if a vessel calls at an intermediate port just outside of the EU shortly after leaving EU waters, that may result in the out-bound voyage being assessed as much shorter than one from/to the actual next load port. The change of routing may cause the operator extra costs, but the benefit of the avoided allowances could be greater, depending on the assumptions made. We would expect this issue to be covered by the scheme once implemented, but at the moment it is an area that needs more thought.

Note: The complete article of ‘The EU Emission Trading System – are you ready?’ by Gard can be found here.

Photo credit: Gard
Published: 8 December, 2022

Mass Flowmeter

MFM-equipped CPN barge first listed under Hong Kong quality bunker scheme

Chimbusco Pan Nation’s bunker barge “Zhong Ran 23” has become the first vessel in Hong Kong listed on Marine Department’s official List of Quality Bunker Vessels, under a newly-launched scheme.

Published

2 hours ago

June 17, 2026

Admin

MFM-equipped CPN barge first listed under Hong Kong quality bunker scheme

Hong Kong-based marine fuel supplier Chimbusco Pan Nation (CPN) on Tuesday (16 June) announced that its bunker barge Zhong Ran 23 has become the first vessel in Hong Kong listed on the Marine Department’s official List of Quality Bunker Vessels.

The list under the Quality Bunker Operator Scheme launched on 3 June.

“The Scheme is a voluntary initiative designed to raise the standard of bunkering accuracy, transparency, and service quality in Hong Kong,” CPN said in a social media post.

“To be listed, a bunker vessel must have its Mass Flow Meter (MFM) system independently certified under ISO 22192, the international benchmark for mass flow metering in bunkering operations.”

CPN added it has operated the MFM system across our fleet of fuel oil barges since 2015.

Manifold Times previously reported Hong Kong’s Marine Department (MD) launching the Quality Bunker Operator Scheme to encourage bunker operators to install and use mass flow meter systems (MFM systems) on their bunker vessels.

MD said the scheme aims to enhance Hong Kong’s bunkering service quality and the competitiveness of Hong Kong ports, thereby further consolidating Hong Kong’s position as an international maritime centre and a major bunkering port.

Under the Scheme, bunker operators of traditional maritime fuel and biodiesel that install and use MFM systems on their bunker vessels, with the MFM systems inspected and certified by an accredited body in accordance with the International Organization for Standardization’s ISO 22192 Standard or equivalent requirements, can apply to the MD for inclusion in the scheme’s “List of Quality Bunker Vessels”, provided they meet the relevant technical and operational requirements.

Photo credit: Chimbusco Pan Nation
Published: 17 June, 2026

Financial Result

Bunker Holding exceeds FY2025/26 forecast despite geopolitical headwinds

Bunker Holding delivered a gross profit of USD 424 million and a profit before tax of USD 73 million, exceeding the Group’s expectations for the year.

Published

2 hours ago

June 17, 2026

Admin

Bunker Holding on Tuesday (16 June) said it delivered a strong performance in the financial year 2025/2026 despite continued uncertainty across global markets.

The year was shaped by geopolitical developments, evolving trade flows, periods of heightened market volatility, and strong competition.

These conditions were further amplified by developments in the Middle East, which added complexity across global energy markets and shipping routes.

In response, Bunker Holding focused on getting closer to customers and understanding the different challenges faced across shipping segments. This enabled faster decision-making, greater agility under pressure, and allowed the Group to respond effectively while continuing to support customers reliably.

Against this backdrop, Bunker Holding delivered a gross profit of USD 424 million and a profit before tax of USD 73 million, exceeding the Group’s expectations for the year. Equity increased to USD 342 million.

Revenue amounted to USD 13.1 billion, a decrease of 4% compared to the previous year. The decline primarily reflected lower average oil prices during the financial year, despite periods of heightened market volatility and stronger pricing towards the end of the period.

“This year, we have taken important steps to strengthen Bunker Holding for the future. We have simplified parts of the organisation, brought teams closer together, and made the changes needed to make us more focused and efficient. Our markets remained challenging and unpredictable, but I am pleased with both the result we have delivered and the progress we have made,” said Peder Møller, CEO of Bunker Holding.

Looking ahead to 2026/27, Bunker Holding anticipates intense market competition alongside continued investments in low- and zero-carbon fuel projects and partnerships.

Changes to the Board of Directors

Bunker Holding said the company is strengthening its Board of Directors with the appointment of several new members and a new Chairman of the Board.

Nina Østergaard, CEO and co-owner of USTC, will assume the role of Chairman of the Board, while Henrik Andersen, Group President and CEO of Vestas Wind Systems A/S, will join as Vice Chairman. Tina Revsbech, CEO of Maersk Tankers, and Kenneth Steengaard, Chairman of the Board of Global Risk Management, will join the Board as new members.

At the same time, current Chairman Klaus Nyborg and Board member Peter Frederiksen will step down from the Board.

Nina Østergaard, incoming Chairman of the Board, said: “I am excited to take on the role as Chairman of Bunker Holding at an important time in the company’s development. Bunker Holding has a strong market position, a clear strategic direction, and significant opportunities ahead. I am also pleased to welcome Henrik Andersen, Tina Revsbech, and Kenneth Steengaard to the Board. They each bring valuable experience and perspectives, and I am particularly pleased that we have attracted such strong international profiles as Henrik and Tina, whose leadership experience from Vestas and Maersk Tankers will further strengthen the Board and support the company’s continued development.”

The addition of Kenneth Steengaard moves Bunker Holding closer to its sister-company Global Risk Management and adds important insight into risk management.

Bunker Holding founder and co-owner Torben Østergaard-Nielsen thanked the departing Board members for their contributions to the company.

Photo credit: Bunker Holding
Published: 17 June, 2026

Business

Oilmar establishes Board of Directors amid international expansion

Three directors are Chief Executive Officer Yusif Mammadov, Chief Finance Officer Nain Shafi, and Legal, Credit and Compliance Head Taira Shikhiyeva.

Published

2 hours ago

June 17, 2026

Admin

Oilmar formalises Board of Directors amid international expansion

UAE-based marine fuel and petroleum products trader Oilmar on Tuesday (16 June) announced the formal establishment of its Board of Directors, marking an important milestone in the company’s evolution.

The three directors are Chief Executive Officer Yusif Mammadov, Chief Finance Officer Nain Shafi, and Legal, Credit and Compliance Head Taira Shikhiyeva.

The formation of the Board was first communicated during Oilmar’s Q1 2026 Townhall as part of a wider governance enhancement initiative and has now been formally implemented.

The Board has been established to provide strategic direction, oversee risk management and governance matters, and support the company’s continued growth across its global operations.

“At inception, the Board comprises three Directors with extensive international experience across the energy, maritime, shipping, and commodity trading sectors. Together, they bring a wealth of industry knowledge and strategic expertise to support the company’s continued growth and development,” the company said.

“The Board is expected to be further strengthened through the appointment of additional Executive and Non-Executive Directors as the company continues to expand its international footprint.”

As part of the enhanced governance framework, strategic direction, risk appetite, and key business objectives will be determined at Board level, while regional management teams will remain responsible for execution within their respective markets. This structure strengthens accountability, promotes effective decision-making, and supports the Company’s long-term growth and succession objectives.

CEO Yusif Mammadov, said: “The establishment of the Board marks the next stage in Oilmar’s development as a global energy and marine fuels business. It creates a governance framework that will support our future growth, strengthen oversight across the organisation, and ensure that our strategic decisions are guided by long-term value creation and responsible risk management.”

Photo credit: Oilmar
Published: 17 June, 2026