January 2015

A Square Where Lovers Meet

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:

There is a little square in the middle of historic Brussels which recently became the center of antique shops and art galleries. It is called The Sablon Square. Actually it consists of two squares Grand Sablon in the Northwest and Petit Sablon in the Southwest divided by the Church of Our Blessed Lady of The Sablon. Back in 12th Century it was an unused open space surrounded by wetlands, grassland and sand and a friar made his home which turned out to a chapel in 14th Century and into today’s beautiful gothic church in 1450’s. Le Petit Sablon is surrounded by 48 little statues representing the medieval guilds of Brussels. In the center stands the statue of Counts of Egmont and Hoorne who were executed by the order of Philip II of Spain in 1568. During 16th century the most prominent noblemen established themselves around Sablon, like The Egmonts, The Culemborgs, The Brederodes, The Mansfelds followed by De Lannoys, De Lalaings etc. By 17th century Sablon area became the most aristocratic and prosperous area in The City.

History of a place is of course its own birth certificate, without which a place does not exist and does not have a background. History is important in defining a place and shaping up its character but places, cities or neighborhoods gain their real characters from the people who live in them. It is the people who actually define a particular area. Because places, like human being, are alive. They have a soul, a character, a language or may be a dialect, an external appearance and a hidden personality which can only be recognized by those who live there and by those who have an intercourse with each other. This is how you communicate with a neighborhood at the end you may not realize but you might have fallen in love with that neighborhood. It is such an intercourse that it pulls you deeper as you live into it. You feel that you are handcuffed by the little antique shops, the fine chocolatiers, the beautiful patisseries and the narrow cobblestones streets as you cannot pull yourself out of the area. As you try to get out from Sablon you find yourself deeper in the streets and at the end of the day you either end up enjoying a delicious meal and wine by a fireplace or in a lovely brasserie among a friendly atmosphere. The real mystery and the magic is in The Egmont House where you want to spend the rest of your life without even thinking of anything else.

I wish you all a happy, prosperous and a peaceful New Year with lots of love and friendship to prevail. I am sure those who live in The Sablon will feel The Christmas and The New Year more profound than most of the others around the World.

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