I am not a gambler, but I doubt I would get decent odds against 2024 being another year of economic and geopolitical surprises. So, it’s nice to write about two certainties that will affect the maritime supply chain this year.
First, ships serving EU ports will need to purchase carbon credits based on the levels of greenhouse gases they emit, starting Jan. 1. Second, from April 25, 2024, shipping consortia and alliances serving EU ports will need to conform to the generic guidance on how they cooperate, following the retirement of the decades-old Consortia Block Exemption Regulation.
Neither development will prove fatal to the fortunes of shipping lines. Exposure to the same competition rules as every other industrial sector will be healthy, and a reassurance to shippers that alliances are cooperating within the same limits that any landside entity would need to. It may even rekindle some of the trust and respect that was shredded during the COVID-19 pandemic.
That will be sorely needed as shipping lines start to pass on the cost of carbon credits purchased under the EU Emissions Trading Scheme (ETS) in the form of new surcharges. Although restricted to European trades, the ETS will be the first experience shippers have of how carbon taxes on bunker fuels work and preview what could become a global burden should the International Maritime Organization adopt a similar measure.
Confusingly, all the early talk is of shipping lines reengineering their networks to avoid calling at EU ports to dodge the competition rules that the rest of us must comply with and game a measure to help save the planet that their customers will be paying for anyway. Hopefully, this is just a passing overreaction to two developments the shipping industry hadn’t expected in 2024. But I wouldn’t bet on it.