This includes information about the introduction of the EU Emissions Trading System (ETS), which will be introduced on January 1, 2024.
The EU has decided that from January 1, 2024, the ETS will also cover maritime transport in and out of the EU and Iceland, as an EEA country.
This means that a CO2 tax must be paid for all goods from the EU and EEA countries to Greenland and vice versa. It affects freight transportation across the Atlantic.
What is ETS?
ETS is a carbon tax introduced by the EU to motivate shipping companies to emit less CO2. ETS is already known in energy-intensive industry and the energy sector, and from January 1, 2024 it will also include maritime transport.
The purpose of the ETS is to cap CO2 emissions and a number of CO2 allowances are issued and traded on an open market. You buy EU Allowances (EUAs) via ETS to cover your CO2 emissions, which after calculating your consumption must be returned as payment for emitted CO2.
Royal Arctic Line must therefore purchase CO2 quotas – EUA to be able to emit CO2 when transporting goods in and out of the EU.
What does ETS cost?
In 2023, it cost around €100 for a ton of CO2. EUA allowances are traded on the free market and the price is determined by supply and demand. What it will cost in 2024 is not known in advance, as allowances are traded on the open market.
The price will be calculated and settled in Royal Arctic Line in the same way as BAFCAF. The rate will be set at 1% from January 1st and continuously adjusted on a monthly basis, similar to BAFCAF.
Who gets the money recovered through the CO2 tax?
The CO2 tax is paid to the EU, so the tax paid is not a payment to Royal Arctic Line. Royal Arctic Line passes on the revenue associated with the tax through trading in EUA allowances.
Why does it affect Royal Arctic Line and its customers?
The tax applies to all goods to and from the EU and EEA countries. Royal Arctic Line transports goods in and out of the EU with the Atlantic ships, both for import and export.
How will the tax be collected?
The tax will be calculated and regulated in the same way as BAFCAF. The fee will appear as a separate line on the invoice you receive from Royal Arctic Line. Your invoice will therefore show how much of your costs go to the EU.
What is Royal Arctic Line doing to minimize the tax on goods to and from Greenland?
Changes to the Atlantic Sailing Plan allow for slower crossings across the Atlantic, which is expected to result in lower fuel consumption.
In connection with the ongoing renewal of the company’s fleet, it is expected that new energy-saving technology can be used.
Any questions regarding ETS should be directed to Royal Arctic Line’s customer service.
