Freight and bulk commodity derivatives broker, Freight Investor Services (FIS), has announced the opening of a new office in Copenhagen. The new office is expected to become the company’s trading hub for emissions-related derivatives which will target clients who seek to control their carbon emissions risk, including the shipping sector.
The derivatives broker is building FFAs (Forward Freight Agreements) to FFEs (Freight, Fuel, Emissions), said CEO John Banaszkiewicz, adding that the company is also looking to offer clients information and contracts for compulsory and voluntary carbon credits.
European shipping will be included within the European emission trading scheme and will have to purchase allowances for emissions over a certain allocated threshold. This measure is also expected to apply to external EU shipping companies that call at European ports.
The outlined plan shows a three-year period of implementation, during which, an increasing percentage of the expected carbon emissions are to be covered under the trading scheme.
From 2026, the EU is expected to implement full compliance. This includes the maritime industry inside the trading bloc’s waters.
Carbon price in early 2020 was at EUR24.58 and increased by 135pc since then to settle at EUR58 in July this year. With an increase in demand for allowances against regulatory framework to reduce emissions, prices are likely to increase further in the future.
Globally, the shipping industry emits a little over 1bn mt of carbon in a year and accounts for around 3pc of total emissions in the world.