Setting off to offsets
Steve Simms of Simms Showers takes a deep dive into the carbon offsetting space and reflects on the risks and opportunities the European Union’s Emission Trading System might present to bunker suppliers.
Since 2012, Tesla has made $1.7 billion selling carbon emission credits, almost more than the company has made selling electric cars. So, might bunker traders, brokers and suppliers now start selling carbon and other greenhouse gas (GHG) emission credits, offsets or allowances to make as much.
To date, in the maritime industry using GHG offsets, credits or allowances has been voluntary. However, as a part of its ‘Fit for 55’ package – the target, to reduce net greenhouse gas emissions by at least 55% by 2030 – the European Parliament is expected in 2022 to adopt legislation including water- borne shipping emissions into its compulsory Emissions Trading System (ETS).
Some 95% of the value of the world carbon market is in the largest global, compulsory (compliance) carbon trading market, the ETS.
Whether through the ‘Thunberg effect’ or market response which, because or despite of credits leads to less emissions, offsets and the like will probably phase out by 2050 or before. Until then, though, they present a notable opportunity for bunker traders, suppliers and brokers which, one way or the other, will present a ‘reformation’ of marine fuel sales.
