DENMARK Trends and Developments Contributed by: Johannes Grove Nielsen and Camilla Søgaard Hudson, Bech-Bruun
In Sweden and Norway, the implementation of Article 3gc does not leave any doubt about the national access for recovering costs related to surrendering allowances. Enforcement issues: the polluter pays, sometimes? The implementation of Article 3gc into Danish law reveals potential enforcement issues relat - ed to the recovery of costs for surrendering EU allowances. This situation is unsatisfactory and creates uncertainty for ship-owners trading in the EU, as the legal grounds for recovering costs may not exist due to improper implementation into national law. However, the national implementation of Article 3gc by member states is not the only obstacle to enforcing EU ETS costs. If the ship-owner has delegated the responsibil - ity for purchasing fuel or operating the ship to a non-EU member state, and there are no con - tractual grounds to pass on costs to the respon - sible party, there is a considerable risk that the ship-owner will be unable to recover these costs. While this is unavoidable due to the sovereignty of the EU concerning third-party countries, it results in a questionable legal position for EU- based ship-owners. This issue is particularly relevant if a ship has been chartered to a third country-based charterer and is being operated in EU territories. If contractual mechanisms for passing on the costs have not been adopted, the ship-owner faces the risk of having to resolve the costs for surrendering quotas. Filling the gaps If ship-owners are not offered sufficient grounds under national law to recover costs against the entity responsible for emissions, the ship-owner
must ensure such ground through contractual means. The Baltic and International Maritime Council (BIMCO) has released several clauses for ensur - ing contractual regulation of EU ETS, including for voyage charter parties, timecharter parties and SHIPMAN contracts. Under the BIMCO ETS – Emission Trading Scheme Allowances Clause for Time Charter Parties 2022, the ship-owner will, in case of the charterer’s failure to transfer allowances to the ship-owner, be entitled to suspend the performance of his or her obligations under the timecharter party until emission allowances are received in full. Further, under the BIMCO ETS – Emission Scheme Transfer of Allowances Clause for Voy - age Charter Parties 2023, the failure to transfer emission allowances will be deemed as non- payment of freight under the voyage charter party. Finally, under the BIMCO ETS – SHIPMAN Emis - sion Trading Scheme Allowances Clause 2023, if either party fails to comply with its obligations under the clause, the other party will have the ability to terminate the ship management agree - ment. Thus, BIMCO has set out resolute enforcement measures that may be used to ensure that costs are ultimately recoverable against the responsi - ble entity. Conclusion In conclusion, the initial compliance deadlines for the EU ETS for the shipping industry are swiftly approaching. The ship-owner or the del - egated ISM company is the ultimate responsible
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