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Hamburg-based private bank Berenberg is entering the field of European carbon emissions trading.

The bank is targeting with this service shipping customers who are to be gradually included in trading with EUAs (European Union Allowances) from 2024 onwards and will be able to purchase these via Berenberg.

Berenberg bank, having wealth and asset management, investment bank and corporate banking divisions, said a custody solution developed specifically for the shipping industry will also be offered.

To remind EU Allowances are climate or carbon credits used in the European Union Emissions Trading Scheme (EU ETS).

Under the EU ETS, shipping companies are “obliged to surrender allowances for verified emissions”. In other words, companies will need to pay for shipping emissions.

Starting from 2024, operators of ships larger than 5,000 gross register tonnage, will gradually be required to purchase EUAs to cover their emissions, which will be verified by an independent body.

From 2026 onwards, 100% of the carbon emissions of ships covered by the EU regulation will have to be offset using EUAs.

The revenues from the EU ETS in Germany go to the climate and transformation fund, which supports programs in fields including improved energy efficiency, the continued development of electric mobility and the expansion of the hydrogen industry.

Philipp Wünschmann, head of shipping at Berenberg, noted that “With the purchase of EUAs in line with the provisions for the shipping industry and their safe custody in special EUA securities accounts, we are helping shipping companies to meet a new EU-wide requirement for carbon emissions, offsetting as efficiently as possible. Our long-standing presence on the market means we understand the market practices and special characteristics of the industry. Our customers benefit from established onboarding and settlement processes.”

“The European Emissions Trading System (ETS) is soon to be launched in the maritime sector. I am delighted that we will be supporting the shipping industry as a partner for EUA trading. The EUA market is still a young one. Recent years have been characterised by sharp price rises and dynamic price movements. This makes it all the more important to develop efficient solutions in good time and in cooperation with a trusted and experienced banking partner,” said Arne Christian Rahner, head of financial markets at Berenberg.