Shipping operators advised not to delay surrendering EUA allowances
In Cyprus, according to Cyprus Mail, EmissionLink Managing Director Philippos Ioulianou warned shipowners and operators against postponing the surrender of EU emissions allowances until the September deadline. In his view, this practice increases financial, commercial and compliance risks for shipping market participants as the sector's coverage under the EU Emissions Trading System expands.
Ioulianou considers the issue not to be the September deadline itself, but the habit of market participants of waiting until the last moment. In his assessment, this can delay key financing and compliance decisions and leave shipowners, managers and compliance service providers exposed to substantial risks.
Growing obligations
According to the EmissionLink chief, after the first FuelEU Maritime compliance cycle, operators must surrender by the end of September EUAs covering their verified emissions. The EU ETS covered 40% of verified shipping emissions for 2024, 70% for 2025, and is set to cover 100% of such emissions for 2026.
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Ioulianou urged verified emissions reports to be viewed not only as part of an annual administrative procedure, but also as an early indicator of financial risk. Once emissions volumes are determined, owners and operators should, in his view, assess their EUA needs, agree their allocation with charterers, and set clear surrender deadlines well before September.
Risks for the responsible party
Many charterparty agreements, including those with BIMCO emissions trading provisions, allow charterers to transfer EUAs close to the date on which they must be surrendered. Ioulianou noted that such commercial flexibility may leave the party responsible for compliance without the necessary allowances if they are transferred late or not transferred at all.
He also advised purchasing allowances in advance for known residual needs that may arise from vessel idle periods, operational changes or disputes. Delaying such purchases, in his assessment, creates risks related to counterparties and EUA price fluctuations. Centralized accounting of emissions, allowance allocation and control over their transfer, Ioulianou added, can help identify potential shortfalls earlier.
