CUS NEWS REPORT FOR WEEK 44 OF 2023

28^th October 2023 – 3^rd November 2023

LOCAL NEWS

Nothing important to report.

INTERNATIONAL NEWS

Implementation of EU ETS for shipping makes progress: Administering Authorities

On the 26^th October 2023, the EU Climate Change Committee agreed the rules for the administration of shipping companies by Member States under the Emissions Trading System.

During the meeting of the Committee, representatives from Member States gave a favourable opinion to the draft implementing act on the rules concerning the administration of shipping companies by administering authorities proposed by the Commission. This act covers aspects related to the information to be provided by the entity responsible for compliance with ETS obligations and rules for the attribution of shipping companies to Member States authorities. The attribution list of shipping companies to Member States will be published by the Commission by 1 February 2024.

Article 3.1 of the Commission Implementing Regulation provides that, for the purpose of attributing a shipping company to an administering authority, the country of registration of a shipping company shall be the country recorded in Thetis MRV.

Based on the above definition, the administering authority of a shipping company is determined by the country recorded in Thetis MRV for each company.

The Regulation also stresses that it is necessary to establish detailed attribution rules for shipping companies that are not registered in a Member State and that did not carry out any voyage falling within the scope set out in Article 3ga of Directive 2003/87/EC in the preceding 4 monitoring years and whose first voyage within the scope of that Directive is a voyage between ports under the jurisdiction of two Member States, and for shipping companies that are not registered in a Member State and that have their greatest number of port calls in two or more Member States. To ensure a smooth implementation of the EU ETS, Member States should exchange information in the case of change of administering authority in respect of a shipping company of a given shipping company.

Article 3.2. of the Regulation that, for the purpose of attributing a shipping company that is not registered in a Member State to an administering authority, data shall be based on data stored in the Union maritime and exchange system (SafeSeaNet).

The above Act is now pending for formal adoption by the Commission and publication in the Official Journal.

Related Publications:

Climate Europa 31.10.2023 - Implementation eu ets shipping makes progress

Attachment 1:Draft Commission Implementing Regulation for application of Directive 2003.87 EC

Attachment 2: ECSA Answer to public consulation on Draft Implementing Regulation

Attachment 3: ECSA C -13265

Israel-Palestine conflict: The effect on the global shipping industry

World Trade Organization (WTO) chief Ngozi Okonjo-Iweala has warned that the escalation in the Israel - Hamas conflict will have a very significant impact on already weak global trade flows, with the WTO recently halving its projection for global goods trade this year.

The operational risk of trading in the region is having an immediate impact on war risks insurance. War risk underwriters are calculating their exposure to the Israel - Hamas conflict as premia for vessels trading to the region are set to escalate.

Israel’s coastline was already a designated high-risk area, which required the payment of additional war risk premium, however, given the size and nature of the escalation, the insurance market is predicting a significant increase in rates as a result of the current conflict that are higher than what the shipping market would have expected.

Furthermore, following the closure of Ashkelon port and its oil terminal – according to reported AIS data – there are no longer any vessels trading to the port. However, for the time being, vessels were continuing to trade in Ashdod, with approximately 20 vessels reportedly within the port area. Reuters is reporting that Ashdod port is imposing restrictions on the loading or discharging of dangerous cargo, which includes flammable, explosive or toxic substances.

INTERTANKO stated in an advisory to members that after the Hamas attacks, it expected tension to rise in the broader Middle East – Gulf, with heightened risks for shipping connected to Israel.

Additionally, the Iranian Government called for a ban on shipping oil to Israel. Iran's supreme leader, Ayatollah Ali Khamenei, has said all Muslim countries should halt trade with Israel, including oil exports.

In relation to this issue, Iran’s foreign minister, Amir-Abdollahian, visited Ankara, following meetings with Qatari leaders and the leadership of Hamas’ Qatar-based political bureau, however, so far, countries like Turkey and Azerbaijan have failed to respond to Iran’s call.

Related Publications:

Hill Dickinson/ 01.11.2023/israel palestine conflict effect global shipping industry

Reuters/02.11.2023/israels ship industry urges government help

CNBC/2023/10/30/israel hamas war leads oil tankers to unusual moves