The Carbon Calculator simplifies emissions expense calculations, allows for scenario analysis to understand the emissions impact of alternative shipping routes, and provides real-time financial projections based on market data.

As an example, let’s use the Carbon Calculator to understand the emissions impact for an alternative shipping route that avoids the Red Sea. Assuming a capsize vessel is traveling at an average speed of 14.3kts, we can input a consumption rate of 45 MT/day and a CO2 factor of 3 to conclude that CO2 emissions for this alternate route would increase from 4,500 MT CO2 to 6,250 MT, also increasing those emissions that are applicable to the EU ETS phase-in from 2,370 MT to 3,120 MT. Using an EUA price of €70 and an exchange rate of 0.91, we can also see the equivalent EU ETS Emissions expense would increase significantly from around $182k to around $240k. While these inputs will be subject to the price movements in the market, the indication in this example is that the deviations in routing away from the Red Sea would increase CO2 emissions across all vessel types and would therefore also increase the emissions expense associated with the EU ETS for those routing into an EU country. 

Yes, the IMOS Platform supports the entire lifecycle of a contract, from allowance settlement and expense accounting to contractual agreement changes and allowance transfers. IMOS ensures seamless management of carbon costs by aligning Time Charter contracts with industry standards while offering flexibility for new or custom clauses, such as the EU ETS-specific Time Charter Parties clause and several Voyage Charter Party clauses released by BIMCO.

To learn more about addressing EU ETS contract challenges, tune in to our on-demand webinar featuring representatives from BIMCO and industry leaders TORM and Trafigura.  

Veson delivers an end-to-end workflow to support the changes you are facing with the addition of maritime to the EU ETS. Functionality that is automatically included in the core IMOS system includes the ability to calculate applicable emissions quantity and associated expenses via the Carbon Calculator, capture and update the expense on the voyage P&L, and update contracts to handle cash settlement of the emissions expense. Additional functionality that comes with risk exposure management solution IMOS Trading & Risk includes the ability to capture of EUA contracts and associated derivatives contracts, track exposure to the EUA market using physical and paper contracts, update contracts to handle cash and allowance settlement, and track and report on current inventory of allowances to determine shortages or overages.

While Veson’s emission expense settlement workflow is comprehensive, it is just a starting point. Veson remains committed to refining our functionality to ensure continual support and flexibility in meeting evolving regulatory demands. Ongoing input and feedback from the maritime industry inform the development of the IMOS Platform, ensuring that it remains aligned with industry standards and best practices in EU ETS compliance. 

By taking a proactive approach to EU ETS and investing in a solution built for the job, maritime professionals can maintain a centralized view of allowances and easily track the business impact on the P&L. Come time to surrender allowances for the preceding year, those who tracked allowances on a per-voyage basis will have a much easier time with compliance and avoid risking the penalties of coming in short. For each tonne of emissions for which no allowance is surrendered in due time, operators must pay a €100 fine as well as pre-pay the remaining allowances for the next year. Names of the penalized operators will be disclosed to the public, and if another mistake is made, the operator may be banned from shipping in the EU.

While it is possible to manage EUA costs manually, it is a tedious effort that is very difficult to audit. As the phase-in logic progresses and the intensity of this regulation ramps up, having a standardized and scalable solution in place will help save significant time and stress as well as protect you from costly fines. 

Veson University is offering two EU ETS-specific courses that detail the regulation itself as well as how the IMOS Platform handles and supports your EU ETS workflows. This carries through the system from the first calculation of the estimated emissions through to the settlement and realization on the contracts and being able to support and handle all the various clauses. Visit Veson University to learn more about the courses and start standardizing continuous learning across your organization.