Ocean Network Express (ONE), the sixth largest ocean carrier in the world, announced March 18 that it has secured its inaugural European Union Allowances (EUA) transaction with bank BNP Paribas.
Introduced January 1, 2024, under the regulations of the EU Emissions Trading System (ETS), EUAs are a type of carbon allowance that allows companies covered by the EU ETS to emit a certain amount of CO2. EUAs can be bought and sold on the market, and the variable market price of EUAs reflects the cost of reducing emissions.
All shipping companies are mandated to monitor, report, and verify their greenhouse gas (GHG) emissions annually and this data will be utilized to determine the EUA that they need to surrender within a compliance period. For every ton of reported CO2, one European Union Allowance (EUA) must be purchased and submitted to the EU each year. EUAs can be purchased on exchanges such as ICE, EEX and Nasdaq, and on the over-the-counter market.
Starting from January 1, 2026, the ETS regulations will expand to include emissions of two additional greenhouse gases: nitrous oxide and methane.
In preparation for the immediate EU ETS compliance, ONE says it has enhanced its internal systems to accurately reflect CO2 emissions data. The company has also initiated a trading account on the Union Registry to hold and transfer EUA according to the procedures. As a result, ONE was able to secure its inaugural purchase of EUA from BNP Paribas on February 8, 2024. The acquired EUA will be subsequently transferred to respective vessel owners in compliance with the agreements as well as the EU ETS regulations, which will ultimately enable the vessel owners to meet their surrender obligations to the EU by September 30th, 2025.
