McDonald made the comments in article published on the Freightlink website covering the impact of the 2024 ETS changes.
The revisions are part of the EU’s ‘Fit for 55′ package, which aims to achieve a 55 % reduction in EU net greenhouse gas (GHG) emissions by 2030, compared to 1990 levels.
As explained by McDonald, the ETS scheme requires ferry operators to buy allowances for their carbon emissions. In 2024, operators must buy allowances for 40% of their emissions. The figure rises significantly to 70% in 2025 and then to 100% they year after that.
Freightlink’s Managing Director says that the changes “will result in an increase in costs for ferry operators, who will pass this cost on to customers”. Those customers include both car passengers and logistics companies.
One way the cost of buying allowances can mitigated is to source cleaner fuels or use battery powered vessels.
“Some operators have already made the change to alternative fuels – for example, Brittany Ferries’ newest vessels run on LPG, which offers a reduction of 25% of carbon emissions. Meanwhile, Scandlines have some 100% battery-powered ships, with more currently being built in Turkey. DFDS and Stena Line are both developing battery powered ferries, with Stena Line also having just ordered some vessels that are designed to run on methanol for their Heysham – Belfast route,” says McDonald.
However, McDonald also makes it clear that even those who go down this path won’t “completely negate the increases in costs to freight users as those operators will need to somehow recoup the cost of these high capital investments.”
Other means of reducing emissions, such as sailing more slowly to burn less fuel, and focusing on vessel utilisation to maximise capacity usage, may also be used by ferry operators. McDonald refers to the fact that Seatruck ferries, whose vessels regularly cross the Irish Sea, are already trialling the former.
Interestingly, McDonald also predicts that the 2024 ETS scheme could see even more freight cross into the Island of Ireland via GB-NI routes. As the ETS scheme only covers vessels come into or out of an EU port, GB-NI crossings are exempt. This could make the crossings more cost-competitive and encourage yet more hauliers to use this route.
“GB⇄NI and domestic routes will not fall under this new regime. This could potentially lead to even more traffic on Northern Ireland routes,” predicts McDonald.