May 2023

A New Era at Lockton Omni! Corporate Risk Management Solutions!

The European Union’s Emissions Trading System (EU ETS) was extended to cover emissions from shipping as of 1st January 2024.

The EU ETS is limited by a 'cap' on the number of emission allowances. Within the cap, companies receive or buy emission allowances, which they can trade as needed. The cap decreases every year, ensuring that total emissions fall.

Each allowance gives the holder the right to emit:

  • One tonne of carbon dioxide (CO2), or;
  • The equivalent amount of other powerful greenhouse gases, nitrous oxide (N2O) and perfluorocarbons (PFCs).
  • The price of one ton of CO2 allowance under the EU ETS has fluctuated between EUR 60 and almost EUR 100 in the past two years. The total cost of emissions will vary based on the cost of the allowance at the time of purchase, the vessel’s emissions profile and the total volume of voyages performed within the EU ETS area. The below is for illustration purposes:
  • ~A 30.000 GT passenger ship has total emissions of 20.000 tonnes in a reporting year, of which 9.000 are within the EU, 7.000 at berth within the EU and 4.000 are between the EU and an outside port. The average price of the allowance is EUR 75 per tonne. The total cost would be as follows:
  • ~~9.000 * EUR 75 = EUR 675.000
  • ~~7.000 * EUR 75 = EUR 525.000
  • ~~4.000 * EUR 75 * 50% = EUR 150.000
  • ~~Total = EUR 1.350.000 (of which 40% is payable in 2024)
  • For 2024, a 60% rebate is admitted to the vessels involved. However, this is reduced to 30% in 2025, before payment is due for 100% with effect from 2026.
  • Emissions reporting is done for each individual ship, where the ship submits their data to a verifier (such as a class society) which in turns allows the shipowner to issue a verified company emissions report. This report is then submitted to the administering authority, and it is this data that informs what emission allowances need to be surrendered to the authority.
  • The sanctions for non- compliance are severe, and in the case of a ship that has failed to comply with the monitoring and reporting obligations for two or more consecutive reporting periods, and where other enforcement measures have failed to ensure compliance, the competent authority of an EEA port of entry may issue an expulsion order. Where such a ship flies the flag of an EEA country and enters or is found in one of its ports, the country concerned will, after giving the opportunity to the company concerned to submit its observations, detain the ship until the company fulfils its monitoring and reporting obligations.
  • Per the EU’s Implementing Regulation, it is the Shipowner who remains ultimately responsible for complying with the EU ETS system.

There are a number of great resources on the regulatory and practical aspects of the system – none better than the EU’s own:

We are thrilled to announce that we have launched our Lockton Omni Corporate Insurance Services as of 01.05.2023.

Please join us welcome;

Ebru Yüksekbilgili who has 28 years of experience with an intense knowledge in insurance broking and international & local insurance market know-how, has joined Lockton Omni in order to take over the leadership role of Omni’s strength in terms of global reinsurance market.

Hakan Sezik with an experience of Garanti Sigorta, HSBC Bank and Marsh Brokerlik since 1993, has joined Lockton Omni in order to take over the leadership role of Omni’s expansion into Risk Management Services.

Mesut Div who started his career in 2003 as a portfolio manager in the bancassurance department of Garanti Sigorta, has worked in the field of financial risks and trade credit insurance since 2012. Mesut has joined Lockton Omni to support our clients in Trade Credit expertise.

Tuğçe Sönmezalp who has 20 years of experience with an intense knowledge in insurance broking and corporate clients has joined Lockton Omni in order to take over the leadership role of client management.

Halil Şahin who started his career in Commercial Union has joined Lockton Omni to lead our corporate insurance claims consultancy department with an experience of 28 years.

Alper Pilavcı who started his career at Ray Sigorta in 2002 has joined Lockton Omni to bring his 21 years of local and global broking experience.

Ayhan Tekinalp who started his career at Garanti Sigorta in 1999, has joined Lockton Omni Corporate Insurance team and will be responsible for client relationship management.

Nilay Kurtuldu who started her career at Mapfre Insurance in 2010, has assumed the role of executive assistant in our Corporate Insurance Department.

We wish the team good luck and look forward to all the great contributions they will make within Lockton Omni family.

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