CircularsNews
January 2010

Troubles at Yemen

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,

The following news issued by Beazley Insurance Group attempts to attrack attention on recent recent turmoil at Yemen.

January 8, 2010

Terrorism: Cooperation between AQAP and the Southern Movement is likely to raise the risk of attacks on energy, cargo and foreign diplomatic assets.

On 24 December 2009, an air strike targeted an al-Qaeda in the Arabian Peninsula (AQAP) training camp in Abyan province, south Yemen - the second raid on a purported AQAP location that week. While Yemen's military claimed to have targeted jihadists, locals said dozens of civilians were killed. AQAP and the Southern Movement are increasingly likely to view the government as a common enemy and to deepen their cooperation. The Southern Movement seeks independence from the San'a government, while AQAP aims to overthrow it and expel foreigners from Yemen. Such cooperation will strengthen AQAP's capability to attack energy, cargo and foreign diplomatic assets at a time when a Shia al-Houthi insurgency in the north is diverting government resources away from fighting the jihadists.

The military have killed or injured dozens of Southern Movement protestors in recent months. Since AQAP claimed responsibility for a 25 December bombing attempt on a US airliner, the US has raised the profile of its security assistance programme in Yemen, signalled by CENTCOM commander David Petraeus's recent talks with President Saleh. This has encouraged domestic perceptions of Saleh's government as an agent of the US. Yemen's campaign against AQAP will very likely incur further civilian casualties, facilitating jihadist recruitment amongst southerners, especially as AQAP is framing its ideology in populist-nationalist, rather than international jihadist, terms. Seeing a potential ally against the state, AQAP has declared support for the southerners' cause. The latter are increasingly likely to provide shelter, weapons and intelligence to AQAP, improving its ability to mount attacks and evade capture.

Southerners will likely sabotage oil pipelines and sporadically block access to ports and airports around Mukalla and Aden. AQAP will more likely attempt bombings of foreign embassies, the military and expatriate compounds. On 4 January 2009, the US, France and UK temporarily closed their embassies in San'a, indicating a heightened risk to Western embassies. Previous attacks on the US embassy include rocket and mortar attacks and a 2008 car bombing that killed 16 people. Likely energy targets for AQAP include the LNG terminal and oil silos in Shihr-Mukalla, where Total, Hunt Oil and Nexen are active, and oil refineries in Aden and Ma'rib. The holding of a UK-sponsored international summit on assistance to the Yemen in London on 28 January is likely to cause a rise in attacks around this date.

West warns Gulf states against possible Al-Qaeda attacks

January 7, 2010

Western intelligence has warned energy-rich Gulf states that Al-Qaeda is on the verge of launching attacks mainly on ships after regrouping in the past few months, the Kuwaiti daily Al-Qabas reported Thursday.

Citing unnamed Kuwaiti security source, the daily said that Al-Qaeda has trained operatives in the region to carry out attacks on war, commercial and passenger vessels in the Gulf and the Arabian Sea.

Western intelligence also urged Gulf states to boost security measures to provide protection for ships, especially oil and gas tankers, the source said.

The Al-Qaeda network has been able to regroup over the past few months, taking advantage of deteriorating security in Somalia and Yemen, and has successfully established command and control bases in the two countries, the source added.

Western intelligence also provided Gulf states with names and locations of new Al-Qaeda command posts in Somalia as well as names of field commanders and members in Gulf states most of whom were unknown previously, the source said.

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