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July 2014

Ukrainian public organizations activated actions against Crimean shipping

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

Sayin Ilgili,

P&I Klup muhabirlerinden Azovlloyd Pandi Services Limited’in yayinlamis oldugu sirküler asagida yer almaktadir. Ukraynali yetkililerin yayinlamis oldugu 255 nolu 15 Temmuz 2014 tarihli yönergeye göre Evpatoria, Kerch, Sivastopol, Feodosia ve Yalta limanlari uluslararasi ticarete kapatilmis olup Kirim limanlarina ticaret yapan gemileri kamulastirma ve mürettebati tutuklama kararindan ve bu dogrultuda gemilere yapilan takibattan bahsedilmektedir.

Ukrainian public organizations activated actions against Crimean shipping

Ukrainian public organizations activated actions against Crimean shipping, by monitoring ship calls and chasing violators of a recent Ukrainian legislation, which is strictly prohibiting all business activities on Crimea peninsula, unless specifically approved.

By way of Directive No.255, entitled “On Closure of Sea Ports”, entered into force on 15th July, 2014, the Ukrainian authorities closed  the ports of Evpatoria, Kerch, Sevastopol, Feodosia, and Yalta  to international shipping. Vessels that call at these ports after the Directive is published will be in breach of Ukrainian Legislation on Occupied Territories- Law of Ukraine No.1207-VII “On  Assurance of Rights and Freedoms and Legal Regime on the Temporarily Occupied Territory of Ukraine”.  According to this law, the property of any company effecting illegal (without Ukraine permission) business in the Crimea can be and will be confiscated, if it’s within Ukrainian law enforcement bodies reach. If this legislation is recognized by IMO and EU, then, vessels of the shipowners – violators may be arrested and confiscated in any country, member of IMO and EU.

Ukrainian activists organizations are intensifying their hunting actions in monitoring the calls of the foreign flag vessels at Crimean ports via AIC  information in order to create and maintain a Black list of shipowners , whose vessels called Crimean ports without prior arrangement with Ukrainian authorities and prosecuting such violators. Activists pinpoint such foreign (non-Russian) vessels - violators, sending protest letters to all involved parties (Ukrainian authorities, authorities of the States of owner/operator and Flag), notifying the authorities about illegal activities and demanding penalization. Besides it is a quit possible scenario blockade of such vessels in the Ukrainian ports by labour activists and organizations.

According to “Occupied territories of the Ukraine” legislation, all perpetrators, including members of the crew and passengers, are subject to criminal prosecution and confiscation of perpetrator’s assets ( including vessels). Activists are headed by a public organization called “Maidan of Foreign Affairs”, “Counsel of public security”, “Mariupol Druzina, an online edition Black Sea News and others.

We would recommend to the shipowners to be pragmatically before sending their vessels to Crimean ports.

Will keep you informed of any further developments of the situation.

Azovlloyd PandI Services Ltd
Mariupol, Ukraine
tel: +380629413025
fax:+380629527004
e-mail: aps@pandi.com.ua
web: pandi.com.ua

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