SSY rolls out EU carbon market compliance service

London-based Simpson Spence Young (SSY) has launched a new service to secure carbon allowance procurement for clients ahead of shipping’s entry into the EU’s emissions trading system (ETS).

The world’s largest independent shipbroker has joined forces with carbon market specialists CF Partners, which operates one of the largest trading desks in the carbon compliance market.

The EU ETS will require shipping companies to surrender allowances for 40% of verified emissions for 2024; 70% for 2025; and 100% for 2026 and beyond. As part of the ETS, all emissions emitted by vessels calling at an EU port for voyages within the EU, as well as 50% of emissions from voyages that start or end outside the EU, and all emissions at berth in EU ports, will be included.

In simple terms, the extension of the EU ETS to shipping means that a cap is set on the total amount of greenhouse gases that can be emitted by a ship, which is reduced over time. Shipping companies can purchase allowances, also known as carbon credits, to cover their fleets’ emissions. Fines will be issued to those exceeding their allowances and if unpaid or there is ongoing non-compliance, port authorities may detain a vessel or even exclude it from a port.

The new SSY service will enable procurement and warehousing of EU carbon credits, thereby alleviating the operational and regulatory challenges that operators would otherwise face as a consequence of the new legislation, the company said.

In February, Wilhelmsen Ship Management (WSM) and shipbroker Affinity Shipping also teamed up to jointly establish an independent company that will provide compliance services related to the EU ETS.