EU ETS drives behavioural change
As of 1 January 2024, maritime transport will be included in the EU Emission Trading System (EU ETS), and by 2027, a similar system will be introduced for road transports. This is how it affects you as a transport purchaser and what WALLENIUS SOL is doing to reduce its emissions.
In June 2021, the EU adopted a climate law confirming that the EU should be climate-neutral by 2050, with an interim target of reducing net emissions by 55% by 2030 compared to 1990. To achieve this, the commission proposed a series of legal changes within the framework of the so-called Fit for 55 package. In April 2023, the European Parliament ruled that maritime transport would be included in the emissions trading from 1 January 2024.
“We welcome the transparency that the ETS will bring. The goal is to drive a behavioural change, not higher costs. The benefits of doing the right thing will also become clear,” says Elvir Dzanic, CEO of WALLENIUS SOL.
New ship programmes, biofuels, and optimisation
With modern and technically advanced vessels, WALLENIUS SOL already leads the RoRo league for low emissions, according to the independent MRV report 2023, and are now actively developing a new construction programme for the next generation of vessels.
“WALLENIUS SOL will, in many respects, move faster than both ETS and IMO require. We are convinced that this is the right thing to do. Not least because we also collaborate with customers who are proactive, customers whose growth is based on green business models,”
explains Elvir Dzanic.
With vessels prepared for biofuels, WALLENIUS SOL is now investigating how the supply of alternative fuels, such as LBG (liquefied biogas), can be ensured. At the same time, measures are being implemented to cut down on fuel consumption, such as real-time route planning, maximising load capacities, and enhancing port operations efficiency.
How does the EU ETS affect the transport buyer?
In October 2023, WALLENIUS SOL launched a new pricing model to clarify how the additional ETS cost is calculated.
“We have introduced a model where the cost is evenly distributed among the users of our services. We will monitor our emissions and purchase emission rights. Per tonne transported, we know that our ETS cost will be lower than many other carriers since our fleet is newer, technologically advanced, and simply emits less,” notes Elvir Dzanic.
He continues, “In the next phase, we will collaborate with our customers to actively find business models that enable sailing on biofuels. In cases where we can do so, the ETS cost will be eliminated.”
Relying on lorry transport for long distances will become even less advantageous when emission rights become part of the equation”
Road transports to be included in ETS by 2027
From 2027, road transports will also fall under the ETS, meaning all modes of transport will be similarly affected.
“It's vital for transport buyers to consider this when planning future logistics solutions. The number of electric lorries on the roads is increasing, but they are mainly designed for shorter distances. Relying on lorry transport for long distances will become even less advantageous when emission rights become part of the equation,” points out Elvir Dzanic.
According to co2everything.com, transporting a parcel weighing 2 kg for a distance of 1000 kilometers results in 0.03 kg CO2e with maritime transport compared to 0.21 kg CO2e with lorry transport.
“For transport buyers based in the Bay of Bothnia, there used to be no alternatives to long road transports. Today, there's a more eco-friendly transport option to and from Central Europe, with proven low emissions,” concludes Elvir.
ETS in Practice
The primary cost component that WALLENIUS SOL will face is the cost of purchasing carbon permits. This is done through an open marketplace. For each tonne of CO2 our vessels emit, one carbon permit will be purchased. Essentially, the fuel consumption of our vessels will be translated into carbon permits, and the cost of emissions will be distributed across the cargo we transport
