Company: TEN-PE
Filing Date: 2025-04-11
Form Type: 20-F
Source: 0001193125-25-079101
Chunk: 81

Company: TSAKOS ENERGY NAVIGATION LTD
Filing Date: 2025-04-11
Form: 20-F
Item: Item 4
Chunk 81
---
  

The European Green Deal, details of which were issued in December 2019, included proposals to include emissions from the shipping sector into the EU Emissions Trading System (“ ETS”). In July 2021, the European Climate Law, which sets out a proposed framework to implement the EU’s aim of being climate neutral by 2050, entered into force According to Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources, in order to mainstream the use of renewable energy in the transport sector. The share of renewable energy within the final consumption of energy in the transport sector is set to be at least 42.5 % by 2030 (minimum share).

In July 2021, the EU Commission submitted its 'Fit for 55' package, consisting of several legislative proposals to ensure EU legislation is in line with the EU's climate goals under the European Green Deal. Two key proposals were the inclusion of qualifying GHG emissions (presently only carbon emissions) from maritime transport in the (existing) EU ETS from 2023 and FuelEU Maritime, a new proposal targeting the GHG intensity of the energy used on board a vessel on a well to wake basis.

  EU Emissions Trading Scheme Directive ("EU ETS")  

The amended EU ETS Directive has applied to cargo and passenger ships of 5,000GT and above since January 1, 2024, and applies to 100% of carbon emissions from voyages between EU ports and 50% of carbon emissions from voyages between an EU port and a non-EU port. The EU ETS is a 'cap and trade' system, where participants purchase allowances via an auction process (or via allocation free of charge), for the purpose of retiring sufficient allowances each year to comply with EU ETS. Surplus allowances can be traded with other participants on a secondary market. An allowance entitles the holder to emit one tonne of CO2 and each year participants must surrender the requisite amount of allowances corresponding to their verified annual of qualifying emissions (monitored, reported and verified in accordance with the MRV (which was also amended in 2023) for the previous reporting calendar year or face paying a financial penalty plus the balance of outstanding allowances. The responsible party is obliged to surrender allowances in accordance with a phase in period: 40% in 2025 for verified emissions relating to the reporting period of 2024,