Trading firm Trafigura criticized the regional nature of shipping's inclusion in the EU's emissions trading system (ETS) and stressed the need for a global carbon tax to decarbonize the shipping industry.
The ETS, which will apply to shipping starting in 2023, is likely to force the EU to use modern vessels and relegate older, less efficient vessels to other parts of the world, Andrea Olivi, Trafigura's head of oil chartering, said today during the Argus Crude Summit in Houston, Texas.
"We're just shifting vessels from one area to another," he said.
Olivi expects the regulation to mostly affect EU-bound tanker routes. One such route is the highly liquid US Gulf coast-UKC Aframax route, currently assessed at $20.09/metric tonne or about $2.58/bl, per Argus pricing. The regulation may affect "tanker freight volatility," he said.
A carbon levy led by the International Maritime Organization (IMO) is the only solution to accelerate shipping's decarbonization, Olivi said.
