Arm One EU ETS At 100% For Shipping
After a phased ramp-up — 40% in 2024 and 70% in 2025 — shipping companies must now purchase carbon allowances for 100% of emissions on intra-EU voyages and 50% on extra-EU voyages.
- VLSFO compliance cost jumped from roughly $220 per tonne to about $319 per tonne, a 45% increase.
- At an EUA price of about €75 per tonne, a single Asia–North Europe round trip on a 10,000 TEU vessel can add $150,000–200,000 in carbon costs.
- From 1 July the UK ETS also applies to shipping, creating a dual-compliance burden for UK port calls.
These costs are not being absorbed. They flow downstream as bunker adjustment factors and ETS surcharges, so every container moving through European ports now carries a carbon price.
Arm Two CBAM Expansion
On 12 June 2026 the EU Council agreed to extend the Carbon Border Adjustment Mechanism to nearly 400 new steel and aluminium downstream products, on top of the original six categories of steel, aluminium, cement, fertilisers, electricity and hydrogen.
- €160 billion in annual imports now face CBAM exposure.
- The shift from the 180 products the Commission proposed to 400+ indicates intent to close loopholes.
- The CBAM certificate price for Q1 2026 was set at €75.36 per tonne of CO₂.
- Official collection begins in 2027, but importers must report through 2026.
If you import steel or aluminium downstream products into the EU, the reporting obligation is already live even though collection starts later. Reporting gaps are the cheapest thing to fix now and the most expensive to fix retrospectively.
