February 2020

Turkish insurance brokers Omni and GTG join forces, Tradewinds

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:

Turkish insurance brokers Omni and GTG join forces

Tie up will also strengthen partner Lockton in Southern Europe

23 October 2015 0:00 GMT

28 February 2020 13:00 GMT UPDATED 28 February 2020 13:00 GMT

By Adam Corbett and London

Turkish marine insurance broker Omni Sigorta has formed a strategic partnership with compatriot GTG Istanbul in a move aimed at extending their global reach.

Both Omni and GTG are strong in Turkey and Southern Europe but the companies are aiming to take on more business outside the continent through the partnership.

Brands to stay

“This partnership process will not change either the Omni or GTG brand, team or working principles in any way,” in a statement Omni said.

“The only intention of this strategic partnership is to adapt to the globalisation trend in the world, widen the domestic and foreign portfolio, become stronger in the insurance markets in order to serve the clients even more reliably and effectively.”

Giant US private insurance broking group Lockton acquired 50% of the shares in Omni, which has been trading for more than 30 years, in 2018 following its earlier acquisition of Italian broker PL Ferrari.

PL Ferrari has also been working with GTG and that relationship will remain intact mainly on the protection and indemnity market.

However GTG and Omni will work mainly on the other marine insurance sectors such as hull and machinery.

Omni has offices in New Jersey, London and Istanbul, where it has a team of 32 brokers and other staff.

Broad coverage

The broker covers all sectors of marine insurance including protection and indemnity, war risks, loss of hire, builders’ risk and hull and machinery.

Omni is regarded as having strong relationships in the world of P&I and the Lloyd’s of London market.

However, the broker is also active in non-marine areas such as engineering, disaster, liability and accident insurance.

Omni general manager Gurhan Kulle said that joining the Lockton group of companies had worked out well. He said that working with PL Ferrari had helped the company more business abroad.

“It is a tough market in all marine sectors, but they have been highly supportive and allowed us to win more business outside,” Kulle said. “We are working very well together and have a high level of respect for each other..”

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