In this page we explain how CLdN RoRo will apply the EU’s compliance-based carbon cost (ETS) to our shipping routes from 1 January 2024.

What will change?

CLdN RoRo will add a CO2 component to its existing BAF fuel surcharge. This combination of BAF and CO2 elements will become the “Energy Surcharge”.

Are all routes treated the same?

While the basic calculation methodology for the CO2 component will be the same for all routes, ETS will only apply on half of the voyage distance for EU-UK routes.

Background

For many years we have added a Bunker Adjustment factor (BAF) to the freight rate to compensate for fluctuations in the price of the fuel (bunker) we use to power our ships. As of 2024, maritime CO2 emissions will be included in the European Emission Trading Scheme (ETS) and our Energy Surcharge will combine the BAF surcharge with the price of CO2 emitted during our ships’ crossings.

The introduction of ETS for shipping will be gradual, covering 40% of CO2 emissions in 2024, increasing to 70% in 2025 and to 100% thereafter. Until the UK imposes a similar scheme, CO2 emissions on lines to/from the UK will only be charged at 50%.

How our Energy Surcharge Reference Value will be calculated

As from 1st January 2024, the Energy Surcharge Reference Value used to look up the relevant surcharge in our surcharge table, will be composed of two elements: a Fuel Component and a CO2 Component. The Fuel Component is based on the average Rotterdam Low Sulphur Marine Gas Oil (LSMGO) price in €/tonne . This follows the methodology we have used for many years. This reference fuel has a conversion factor of 3.206 i.e. one tonne of fuel consumed emits 3.206 tonnes of CO2. The CO2 Component is a new element and will be based on the average CO2 price (EEX EUA End of Day Index price in €/tonne). The CO2 Component is adjusted during the phase-in period (-60% in 2024) and for routes to/from the UK (a further -50%).

By using the Energy Surcharge Reference Value, you will be able to look up the applicable unit cost for each route in the same way as before. To help you better understand the scope of the change, we have created a reference table that we will update each month between now and the end of 2023. This shows the surcharge you are currently paying and what that amount would be if the ETS regulations were in force today.

Example: Energy Surcharge calculation Zeebrugge – Teesport:

Using the applicable Low Sulphur MGO reference price for the August-September reference period of EUR 860.82 per tonne, and an average CO2 price over the same period of EUR 84 per tonne, the Energy Surcharge Reference Value for this service between Belgium and the UK would be:

Fuel component: 860.82 €/tonne
CO2 component: 53.86 €/tonne (84 x conversion factor of 3.206 x phase-in discount 2024 of 40% x EU-UK discount of 50%.

Energy surcharge reference value: EUR 860.82 + EUR 53.86 = € 914.68. The Energy Surcharge for this service would therefore be EUR 108.66 per freight unit compared to EUR 99.42 before the introduction of ETS.