From 2024 onwards, ships calling at ports in the EU will be liable for the cost of their emissions. To help ship operators manage their emissions liabilities, OceanScore has partnered with RWE to develop an integrated solution to mitigate emissions risk and trade carbon allowances under the impending EU ETS regime.

“The industry faces a major challenge to navigate the complexity of the new regulation and mitigate financial risk due to the requirement to purchase carbon credits to cover the cost of emissions, which will reach €8 billion or more annually,” says OceanScore’s co-managing director Albrecht Grell.

“The interplay between owners, managers and charterers creates significant complexities unique to shipping and poses potentially significant risks, especially for ship managers, if not managed properly. Excel alone will not be sufficient to maintain transparency and control of these processes.”

Automating process of compliance

A Hamburg-based provider of sustainability data and compliance solutions, OceanScore has developed a web-based ETS Manager to manage and monitor the entire process from automatically ingesting vessel operational data, assessing the need for EU Allowances (EUAs), allocating them to owners or stakeholders, requesting and accounting for them, and tracking open positions. It incorporates the trading tool EUA Trader, powered by RWE Supply & Trading, to buy and sell EUAs.

OceanScore’s EUA Trader is also available as a standalone application, and for those companies wishing to outsource management of their EUA accounts to their respective registries, OceanScore says it can support this by monitoring account movements through various APIs in ETS Manager.

According to Grell, this solution has a high level of automation to reduce administrative workload and possible issues with wrong data entries, and is geared to “simplifying complexity” for shipping companies.

Monitoring EUA liabilities

The company says this regulation poses issues such as how to accurately monitor emissions, how to acquire and trade EUAs, which trading platform to use, how to achieve the best price, how many EUAs should be purchased and who should pay for carbon credits.

OceanScore’s co-managing director, Ralf Garrn, explains: “With the clock ticking to implementation of the EU ETS, shipping companies need to understand the practical implications and initiate efficient systems to address these issues and ensure compliance. A solid monitoring solution, properly covering the many different options to deal with the ETS regime, is a necessity given the complexities of shipping and the ETS regulation.”

The ETS Manager is underpinned by a network of third-party collaborations, which Garrn says will support a smooth end-to-end process for emissions management, from securing good quality data at the outset to ensuring trustworthy EUA trading at the other end.

Reliable trading platform

The system’s EUA Trader tracks the market price of EUAs and facilitates buying and selling of carbon credits on the RWE Supply & Trading platform through an online operation, with the ability to buy incremental volumes as needed and forward trading flexibility to hedge the risk of price changes.

EUA purchases can be made for individual or multiple ships and these transactions can be allocated to specific stakeholders in the value chain, eliminating the need to conduct inter-company trades and avoiding unnecessary price/cost disputes.

“RWE Supply & Trading has a strong international reputation with high credibility and a proven track record in EUA trading, making them the ideal partner for our market-leading ETS solution for shipping,” continues Grell.

“The feedback we are getting from the market is that the flexibility of the trading platform we offer, as well as the full integration of this trading platform into our ETS management solution, offer unique benefits to the shipping community. Our extremely competitive prices serve as an additional argument.”

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