CircularsNews
January 2015

Libya - Security and Safety for Vessels

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:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02003L0087-20230605

https://climate.ec.europa.eu/eu-action/transport/reducing-emissions-shipping-sector_en

https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/what-eu-ets_en

Dear Sir/Madam,

We received the following circulare from Skuld, an International Group Club concerning the above and would like to share it with you.

Urgent - Member Advisory

Applicability: Shipowners and Charterers

Members will be aware of the recent high profile incident involving a vessel being targeted by an air strike resulting in two crew deaths. The situation in Libya remains very volatile and any vessel that may call there needs to prioritise safety at all times.

The Association is grateful to its correspondents Gargoum Legal Marine and Germa Shipping & Stevedoring Co. in Libya and H. Vassallo & Associates Ltd. in Malta for continuing to provide information on developments.

The development

Recently, as was reported in both shipping and main stream news media, a tanker vessel that was at the Libyan Port of Derna was targeted by an air strike resulting in the tragic death of two crew members and further injuries.

While there have been air strikes from unidentified aircraft in the past near port areas and towns, this incident appears to have occurred with the involvement of the Libyan Air Force and / or other Government military forces. In this regard, reference to a Government is in relation to the institution presently residing in Tobruk, which at this time remains the official internationally recognised body. A competing authority remains in Tripoli.

The incident has led to increasing focus on the safety and security situation in Libya, in particular the Maltese Government renewed its travel warning against all forms of travel to Libya.

Port of Misrata - Air strikes

In addition to the development at Derna, the Association has learned that the military of the official Government of Libya has warned of possible air strikes around the Port of Misrata and which could put vessels in that area at risk. This information was also received by BIMCO.

The Association has not been able to fully verify this information, but must urge all vessels going in to this area to exercise caution and seek to advance verify what the latest local position may be.

Advice

The Association has previously advised that the internationally recognised Government is currently based in Tobruk, while various militia groups and other armed forces have seized control of or are active in different parts of Libya such as Derna and Benghazi, and possibly Misrata, too.

According to our correspondents, as of 13 January 2015, the situation is as follows in the ports of:

·         Benghazi remains closed

·         Tripoli is operating "normally", but please note below

·         Tobruk is operating normally

·         Al Khoms is operating normally

·         Misrata/Misurata may be operating "normally", but please note the comments above and below

We would highlight to members that Tripoli is currently not under the control of the internationally recognised Government of Libya. Cargo and ship operations still appear to be underway, but it has proven difficult to verify the same.

We would further highlight that while Misurata is said to be still operating, BIMCO, our correspondents and the Association through other sources understands the area may become subject to military action and that ships may be at risk in this zone.

Recommendations

We continue to strongly advise members intending to call at Libya to proceed with caution.

Information should be sought continuously from all available sources about latest developments.

Vessels should be ready and instructed to take, at short notice, appropriate steps to prioritise safety.

In the meantime the Association would refer members to its previous updates on Libya, including that of 19 December 2014: Libya: Renewed fighting.

For further information, members are asked to contact the Association:lossprevention@skuld.com

Janice Choy
Claims Executive
Skuld Singapore Branch

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