In November 2023, the Government of Greenland approved a three-year plan to adjust Royal Arctic Line’s freight rates. The second phase of the freight rate changes will take effect on January 1, 2025. Here, rates will be increased by 3.1% to ensure savings for future investments, plus the ongoing rate increase of 2.5%.
The ETS surcharge (Emission Trading System), which is the EU allowance for CO2 emissions in and out of EU/EEA countries, is increased from 1.27% to 1.57%. The ETS surcharge is paid to the EU, so the tax paid does not accrue to Royal Arctic Line.
Regarding the oil and currency surcharge, this is maintained at its current rate of 10%. Royal Arctic Line does not profit from the oil and currency surcharge, which is used solely to hedge the company against the effect of fluctuations in oil prices and exchange rates.
In 2023, both the Government of Greenland and the Greenlandic business community were presented with different models for the rate adjustment. The dialogue between the parties resulted in the chosen model resulting in a freight rate adjustment over 3 years, where the freight rate will be increased by 6.4% in 2024, 3.1% in 2025 and 2.2% in 2026. It was the parties’ assessment that a gradual increase in rates can be better absorbed by customers than if the total increase is introduced at once. To avoid sudden rate increases, it was also decided that in the future, for the first time in 2025, there will be an ongoing rate increase of 2.5% per year.
For further information contact:
CCO John Aage Nielsen, johni@ral.gl
