€102,000 a week for emitting smoke. The profit-and-loss accounts of shipping in the Atlantic are feeling the direct impact of Europe’s climate framework. The convergence of the EU Emissions Trading System (EU ETS) and the entry into force of the FuelEU Maritime regulation are substantially altering the operating cost structure for vessels sailing between the mainland and the outermost regions. Beatriz Calzada, president of the Port of Las Palmas, is unequivocal: “We will never consider the battle lost.”
The Canary Islands authorities’ position is to continue explaining that they are outermost regions and transit ports, “and that we must guarantee these routes because the supplies for our daily consumption and for the tourism sector, which is our economic engine, depend on them. We cannot afford to lose routes; our connectivity must be guaranteed,” said the Coalición Canaria (CC) leader.
Businesspeople in the sector consulted by Canarymaritime agree that the financial impact is no longer measured in long-term forecasts, but in weekly bills that squeeze shipping companies’ margins. It is true that this cost is passed on to tourists in the case of cruises, but it ultimately becomes an additional cost in supply chains in an environment where, in places such as Las Palmas, a dockworker earns €8,800 net per month, compared with €160 in Casablanca over the same period.
A typical itinerary consuming 450 tonnes of MGO (Marine Gas Oil) or VLSFO per week on routes connected to European ports generates an obligation to surrender emissions allowances (EUA — European Union Allowances) equivalent to approximately 1,417 tonnes of carbon dioxide. Taking as a reference prices on the carbon market managed by the European Energy Exchange (EEX), with an average price stabilised at €72.00 per tonne of CO₂, the additional regulatory bill per vessel and per week amounts to exactly €102,000. This cost is incorporated directly into vessels’ operating budgets, with no possibility of being amortised in the short term.
Green levy
Reports by the United Nations Conference on Trade and Development (UNCTAD) and the European Community Shipowners’ Associations (ECSA) warn of the risk of competitive distortion generated by this additional cost at peripheral logistics hubs. The application of EU rules penalises direct voyages originating in or bound for the European Union, driving an accelerated restructuring of trade routes to mitigate the impact of the green levy.
Major corporations in the sector have responded by activating regulatory-arbitrage tactics through changes to their port calls. Global operators such as Mediterranean Shipping Company (MSC), and cruise divisions such as Carnival Corporation, are redesigning their Atlantic itineraries by introducing technical or commercial stops in third-country locations such as Tangier Med in Morocco or even Mindelo in Cape Verde.
The avoidance mechanism takes advantage of the precise wording of the European regulation. Including an intermediate port outside the European Union breaks the continuity of the calculation for the transatlantic voyage. Exposure to the EU ETS, which taxes 100% of the fuel consumed between two EU ports, is then calculated only on 50% of the international leg connecting the non-EU port with European territory.
Cape Verde?
Estimates published by market analysis firm Alphaliner and confirmed by the Port Authority of Las Palmas confirm the economic incentive behind this strategy. Diverting a route through Tangier Med or Cape Verde allows a container ship or large cruise vessel to save up to €1.8 million per year per vessel on the purchase of emissions allowances, excluding the operating costs of the additional port call itself.
The European Maritime Safety Agency (EMSA) monitors the risk of carbon leakage and loss of connectivity on island and outermost-region routes. The accumulation of additional costs through FuelEU Maritime, which penalises the energy intensity of traditional fossil fuels, puts further pressure on a fleet that lacks synthetic or biofuel alternatives at competitive prices in the Atlantic basin.
The EU regulator is facing criticism from terminal operators in southern Europe. Canary Islands port facilities are watching transit cargo opt for neighbouring hubs exempt from climate taxation, consolidating a scenario in which the cost of decarbonisation is reshaping the map of international maritime trade at the expense of European competitiveness.
The article “ETS transition in the Canary Islands: a weekly bill of €102,000 per vessel” was first published on canarymaritime.com.
