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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
LNG
LNG vessels operating within Europe are bearing the cost of purchasing EUA carbon certificates under new shipping emissions rules from 1 Jan 2024, increasing variable shipping costs according to Timera Energy.
- Shipping activities under the EU-ETS carbon scheme will be phased in over the next 3 years. Vessel owners’ burden will increase from 40% of emissions cost in 2024 to 70% in 2025 and 100% in 2026 for all ships over 5,000GT in size travelling within Europe.
- The scheme applies for laden and ballast legs with 100% of emissions for voyages starting and ending within Europe and 50% of emissions for voyages to or from Europe.
- The incremental costs from the change may not seem huge, but at the margin can impact LNG market price spreads and cargo flows especially in an oversupplied market.
- The increase in shipping cost to Europe could raise European LNG prices vs other destinations to incentivise the flows to Europe but could also reduce European gas demand due to the higher prices.
- Even relatively small changes in shipping costs and cross basin spreads can have a substantial impact on cargo routing and margins.
Source: Timera Energy
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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