SIMIC

EU carbon prices surged to an all-time high of US$102.34 per tonne on December 8, causing calls for intervention to curb what many see as excessive financial speculation.

S&P Global Platts Analytics expects EU prices to average $74.55 per tonne in 2022, compared with an average of $60.05 per tonne in 2021.

Negotiations on the European Commission's (EC) Fit-for-55 climate and energy package are set to continue under the French presidency of the EU Council in the first half of 2022.

Specifically, the EC's proposal to add shipping to the EU ETS has put bloc regulators on a collision course with industry.

"ICS believes that a mandatory global levy-based MBM [Market Based Mechanism] is strongly preferable over any unilateral, regional application of MBMs to international shipping, such as that proposed by the European Commission," said the International Chamber of Shipping (ICS).

"A piecemeal approach to MBMs (the EU ETS will only apply to about 7.5 per cent of global shipping emissions), will ultimately fail to reduce global emissions from international shipping to the extent required by the Paris Agreement, whilst significantly complicating the conduct of maritime trade."