Shipping giants pay for EUA but they make good money on it

2024/03/27 at 11:08 AM

The largest container shipping carriers do not avoid fees for CO2 emission permits (EU Allowances, EUA), according to the EU ETS system functioning in Europe but at the same time, they make profits from it, from their own transport surcharges imposed on customers, which are higher than they should be. In extreme cases, even over 300,000 euros per voyage on a mega container ship. This is the key conclusion of a study by Transport & Environment (T&E), the EU’s federation of green organisations.

Shipping giants pay for EUA but they make good money on it
Source: iStock

The analysis was based on data from 565 voyages to/from European ports of 20 ships of various sizes from the four largest shipping companies in Europe: MSC, Maersk, CMA CGM and Hapag-Lloyd. The calculations of CO2 emission prices assume “conservative” estimates of EUA purchases of 90 euros per 1 tonne of CO2, the authors note. However, it is much higher than the EUA price at the end of last week (53 euros per 1 tonne), although lower than last year (maximum – around 100 euros).

The calculations refer to the EU directive, which, in early January of the current year, covered deep sea shipping with the EU ETS. This year, vessel users have to pay for 40 per cent of their CO2 emissions. This amount will increase in the following years and it will reach 70 per cent of vessels’ CO2 emissions in 2026. The EUA amount is determined by the market.


The analysis shows that shipping companies in almost 90 per cent of cases charge customers more than the actual EUA costs they incur. As a result, they profit from the EU carbon market. In the most extreme case, on a single journey from China to Germany, Maersk is likely to earn 325,000 euros from its container ship’s voyage, T&E estimates. The same carrier will also achieve the highest profit for the round trip – around 60,000 euros. For the other analysed carriers, these amounts are lower: MSC – 25,000 euros, Hapag Lloyd – 23,000 euros, CMA CGM – 14,000 euros.

While individual profits from each voyage are not always that high, for carriers with hundreds of ships a year this will translate into millions in profit, T&E emphasises. It also reminds us that Maersk is one of the leading carriers in implementing climate protection solutions – for instance, it has started operating methanol-powered container ships.

Do they always make money?

“The shipping giants are defrauding customers by using environmental protection measures as a way to charge customers more. Whether it’s disruptions in the Red Sea or a new price on carbon emissions, shipping companies always win,” comments Jacob Armstrong, shipping manager at T&E. According to him, economies of scale translate into the fact that the shipping industry can absorb even large price shocks. T&E gives an example of this.

While the EUA purchase requirement translates into mere cents in increases in the unit price of most consumer goods, such as a bunch of bananas, a pair of sneakers or a television set, these costs pale in comparison to the much larger surcharges resulting from trade disruptions in the Red Sea following the Houthi attacks. In one of the analysed by T&E examples of routes from Asia to Europe operated by the French shipping company CMA CGM, the cost of ETS is less than 1 per cent of the container price, while the surcharge on the freight rate due to longer journeys around southern Africa is almost 18 per cent of container’s total price.

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