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The container ship Maersk Murcia sits moored to a terminal in the port of Gothenburg, a busy shipping centre on the west coast of Sweden, as cargo is loaded onto it by crane before it sets sail on August 24, 2020.
JONATHAN NACKSTRAND | AFP | Getty Images

LONDON — The European Union is due to propose an unprecedented overhaul to its carbon market this week, seeking to put a price on shipping emissions for the first time.

And the region’s shipowners are deeply concerned.

The European Commission, the EU’s executive arm, is set to present its green fuel law for EU shipping on Wednesday. It is part of a broader package of reforms designed to meet the bloc’s updated climate targets.

To be sure, the EU has committed to reducing net carbon emissions by 55% (when compared to 1990 levels) through to 2030, becoming climate neutral by 2050. The EU says this will require a 90% reduction in transport emissions over the next three decades.

To meet these targets, the EU plans to undergo the biggest revamp of its Emissions Trading System since the policy launched in 2005. Already the world’s largest carbon trading program, the ETS is now widely expected to expand to include shipping for the first time.

Lars Robert Pedersen, deputy secretary general of BIMCO, the world’s largest international shipping association, says it is no secret the industry has concerns about the EU’s plans.

You’re not going to change the fleet on a dime. In the near to medium term any imposition of a carbon price would essentially be a tax.
Roman Kramarchuk
Head of future energy analytics at S&P Global Platts

“There is a strange misbelief in Europe that these kinds of actions put pressure” on other regions to do the same, Pedersen told CNBC via telephone. “I think, frankly, it has the opposite effect.”

He argued the proposal was “not conducive” to international policy, would fail to reduce regional carbon emissions and ultimately take money out of the shipping industry when it could otherwise be spent on reducing emissions in the fleet.

“It is taxation. Does that help anything when it comes to decarbonization? I don’t think so. It looks more like it is an effort to collect money — and so be it,” Pedersen continued. “Europe decides what Europe decides and there’s not so much you can do about that, I guess, other than highlight that it might not be the most appropriate way to reduce emissions.”

His comments come shortly after Transport & Environment, a European non-profit, purportedly obtained a leaked proposal for a draft of the first-ever law requiring ships to progressively pivot to sustainable marine fuels.

A liquid natural gas (LNG) storage silo at the LNG terminal, operated by LNG Croatia LLC, in Krk, Croatia, on Monday, Jan. 25, 2021.
Petar Santini | Bloomberg | Getty Images

A spokesperson for the commission declined to comment on the draft proposal. The EU has said action to address EU international emissions from navigation and aviation is “urgently needed” and initiatives to address these areas will be designed to boost the production and uptake of sustainable aviation and maritime fuels.

Pedersen said it was important not to panic over the leaked draft, noting that it could still be revised in the coming days and there are many more hurdles to overcome before the measures become EU policy.

EU member states and the European Parliament would first need to negotiate the final reforms, a process that analysts estimate could take roughly two years.

“To be frank with you, I haven’t even bothered to read it because I think it is a waste of time at this point. We have a date when the final proposal will be presented, and we will read that very carefully,” Pedersen said.

‘An environmental disaster’

Shipping, which is responsible for around 2.5% of global greenhouse gas emissions, is seen as a relatively difficult industry to decarbonize because low-carbon fuels are not widely available at the required scale.

Soren Toft, chief executive of the Mediterranean Shipping Company, the world’s second-largest container carrier, has also criticized the EU’s proposal. Speaking to The Financial Times last month, Toft warned the proposals would have the opposite effect of their intentions in the absence of readily available low-carbon fuels.

What’s more, it is not just the shipping industry that has voiced opposition to the EU’s plans.

Transport & Environment described the leaked draft of the commission’s proposal as “an environmental disaster,” arguing the policy does not incentivize investment in low-carbon fuels such as renewable hydrogen and ammonia. Instead, it argues the proposal promotes liquefied natural gas and “dubious” biofuels as an alternative to marine fuel oil.

“It’s not too late to save the world’s first green shipping fuel mandate,” said Delphine Gozillon, shipping policy officer at Transport & Environment. “The current draft pits e-fuels against much cheaper polluting fuels, giving them no chance at all to compete on price. The EU should revise the draft to include an e-fuels mandate and make them more cost-attractive through super credits.”

Europe’s ETS is the bloc’s main tool for reducing greenhouse gas emissions that cause climate change. It forces heavy emitting businesses, from aviation to mining, to buy carbon permits in order to create a financial incentive for firms to pollute less.

One issue currently afflicting the scheme, however, is so-called “carbon leakage,” where businesses transfer production (and emissions) elsewhere due to the relative cost of polluting in Europe.

The EU is expected to address this problem, potentially implementing what’s known as the carbon border adjustment mechanism from 2023. The policy is an attempt to level the playing field on carbon emissions by applying domestic carbon pricing to imports.

How will the EU’s proposal impact carbon prices?

“How shipping is brought into a pricing regime is critical,” Roman Kramarchuk, head of future energy analytics at S&P Global Platts, told CNBC via email.

“But the July proposal will be far from a done deal,” he continued. “It’s worth remembering that the EU had to temper its ambitions around aviation previously in response to push-back from trade partners — though the upshot of that was a more globally inclusive approach from the UN through the CORSIA program.”

The Carbon Offsetting and Reduction Scheme for International Aviation initiative refers to a United Nations deal designed to help the aviation industry reach its “aspirational goal” of making all growth in international flights “carbon neutral” from 2020 onwards.

Kramarchuk said it was important to note that the proposed policies were not expected to constitute an outright ban on specific fuels, adding S&P Global Platts sees increasing shares of the shipping fleet being powered by LNG, methanol or ammonia through to 2030.

Electricity pylons are seen in front of the cooling towers of the coal-fired power station of German energy giant RWE in Weisweiler, western Germany, on January 26, 2021.
INA FASSBENDER | AFP | Getty Images

The impact that the EU’s proposal has on carbon prices will also be “crucial,” Kramarchuk said, predicting an end-of-year target for the EU’s benchmark carbon price at 60 euros per metric ton.

The December 2021 carbon contract surpassed 50 euros for the first time ever in May, having stood at around 20 euros before the coronavirus pandemic. It was last seen trading at around 54 euros.

Higher carbon prices would likely raise questions about the competitive decisions shipping firms take around fuel choice and in turn depend on how carbon emissions in fuels are accounted for, Kramarchuk said.

“But you’re not going to change the fleet on a dime. In the near to medium term any imposition of a carbon price would essentially be a tax.”

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CNBC Daily Open: Investors bet the fragile ceasefire would hold

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CNBC Daily Open: Investors bet the fragile ceasefire would hold

US President Donald Trump speaks to reporters about the Israel-Iran conflict, aboard Air Force One on June 24, 2025, while traveling to attend the NATO’s Heads of State and Government summit in The Hague in the Netherlands.

Brendan Smialowski | Afp | Getty Images

The ceasefire between Israel and Iran appears to be holding. In yesterday’s newsletter, we talked about how a blitzkrieg of missile-led diplomacy seemed to help de-escalate tensions.

The flipside of that strange path to a truce is that missiles, well, are fundamentally weapons. Mere hours after both countries agreed to the ceasefire, Israel said its longtime rival had fired missiles into its borders — an accusation which Tehran denied — and was preparing to “respond forcefully.” Probably with more missiles.

U.S. President Donald Trump — who reportedly brokered the ceasefire with Qatar’s Emir Sheikh Tamim bin Hamad Al Thani — expressed frustration with those developments.

“I’m not happy with them. I’m not happy with Iran either but I’m really unhappy if Israel is going out this morning,” Trump told a reporter pool en route to the NATO summit in the Netherlands.

His admonishments seemed to work. There is now a fragile armistice between the two countries.

Oil prices fell and U.S. stocks jumped.

Reuters uploaded a photo of Israeli residents playing frisbee at the beach on June 24. Flights at Israel’s Ben Gurion Airport are resuming, and Iran’s airspace is partially open, according to flight monitoring firm FlightRadar24, CNBC reported at around 3 a.m. Singapore time.

Three hours after that update, NBC News, citing three people familiar with the matter, reported that an initial assessment from the U.S. Defense Intelligence Agency found the American strikes on Iran’s nuclear sites on Saturday left “core pieces … still intact.”

And so it goes.

What you need to know today

Israel-Iran ceasefire holds, for now
The fragile ceasefire between Israel and Iran,
announced by Trump on Monday, appears to be holding. Israel on Tuesday said it would honor the ceasefire so long as Iran does the same. Earlier in the day, both countries accused each other of violating the truce, and said they were ready to retaliate, prompting Trump to say he’s “not happy” with them. Stay updated on the Israel-Iran conflict with CNBC’s live blog here.

Markets jump as traders bet on truce
U.S. stocks jumped Tuesday on expectations that the Israel-Iran ceasefire would hold. The S&P 500 gained 1.11% to put it just 0.9% away from its 52-week high. The Dow Jones Industrial Average added 1.19% and the Nasdaq Composite climbed 1.43%. The Nasdaq-100 rose 1.53% to close at an all-time high. Europe’s Stoxx 600 rose 1.11%. Travel stocks were some of the best performers, while oil and gas stocks fell the most.

Oil prices slump for a second day
Oil prices tumbled Tuesday, its second day of declines, as the market bet that the risk of a major supply disruption had faded. U.S. crude oil settled down 6% at $64.37 a barrel while the global benchmark Brent fell 6.1%, to $67.14 during U.S. trading. Prices closed 7% lower on Monday. Earlier Tuesday, Trump said China can keep buying oil from Iran, in what seemed like a sign that the U.S. may soften its pressure campaign against Tehran.

Powell says Fed is ‘well positioned to wait’
At a U.S. congressional hearing Tuesday, Federal Reserve Chair Jerome Powell said the economy was still strong. But he noted that inflation is still above the central bank’s target of 2%, and the Fed has an “obligation” to prevent tariffs from becoming “an ongoing inflation problem.” In combination, those considerationsmake the Fed “well positioned to wait” before making a decision on interest rates.

U.S. is committed to NATO: Secretary-General
There is “total commitment by the U.S. president and the U.S. senior leadership to NATO,” the military alliance’s Secretary-General Mark Rutte said Tuesday morning, as the summit kicked off in The Hague, Netherlands. But America expects Europe and Canada to spend as much as the U.S. does on defense. Ahead of the summit, members agreed to increase defense spending to 5% of gross domestic product by 2035.

[PRO] Not ‘bullish enough’ on rally: HSBC
The S&P 500′s rally off its April lows has brought it back to roughly 1% off its record high in a very short time. It’s an advance that has perplexed many investors, who worry that another pullback is on the horizon. But Max Kettner, chief multi-asset strategist at HSBC, said he worries he’s not “bullish enough” on the current rally.

And finally…

Pictures from the semi-official Tasnim news agency show the Stena Impero being seized and detained between July 19 and July 21, 2019 near strait of Hormuz, Iran.

Contributor | Getty Images News | Getty Images

Strait of Hormuz GPS jamming remains major security issue, tanker CEO says

Despite a tentative ceasefire between Israel and Iran on Tuesday, security issues in the Strait of Hormuz continue for shipowners.

According to Angeliki Frangou, a fourth-generation shipowner and chairman and CEO of Greece-based Navios Maritime Partners, which owns and operates dry cargo ships and tankers, vessels in the Strait of Hormuz are still being threatened by continuous GPS signal blocking.

“We have had about 20% less passage of vessels through the Strait of Hormuz, and vessels are waiting outside,” Frangou told CNBC.

“You are hearing a lot from the liner [ocean shipping] companies that they are transiting only during daytime because of the jamming of GPS signals of vessels. They don’t want to pass during the nighttime because they find it dangerous. So it’s a very fluid situation,” Frangou said.

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5,000 electric Mercedes vans join Amazon’s delivery fleet

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5,000 electric Mercedes vans join Amazon’s delivery fleet

Mercedes-Benz is sending nearly 5,000 electric vans to Amazon’s European delivery partners in its biggest EV handoff to date. The fleet will hit the streets in five countries in the coming months.

Three-quarters of the fleet are Mercedes’ larger eSprinter vans, while the rest are the more compact eVito panel vans. More than 2,500 are going to Germany, and Amazon says this new EV fleet will help deliver more than 200 million parcels a year across Europe.

This is the biggest EV order Mercedes-Benz Vans has ever received. It builds on a partnership that started in 2020, when Amazon first added more than 1,800 electric vans from Mercedes to its delivery network.

“We’re further intensifying our long-standing relationship with Amazon and working together toward an all-electric future of transport,” said Sagree Sardien, head of sales & marketing at Mercedes-Benz Vans. “Our eVito and eSprinter are perfectly tailored to meet the demands of our commercial customers regarding efficiency and range.”

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In 2020, Mercedes-Benz joined Amazon’s Climate Pledge, a commitment Amazon co-founded with Global Optimism to reach net zero by 2040.

Both the eSprinter and eVito are designed with delivery drivers in mind. With batteries tucked into the underbody, the vans offer unrestricted cargo space. Both come standard with the MBUX multimedia system, which supports the integration of automatic charging stops and Mercedes’ public charging network via navigation.

Safety and comfort got upgrades, too. New driver assistance features come standard, and the Amazon vans are customized with shelves and a sliding door between the cabin and cargo area for easy parcel access.

The eVito vans, which were built at Mercedes’ plant in Vitoria, Spain, are ideal for last-mile urban deliveries. They come in 60 kWh or 90 kWh battery options, with peak motor outputs of either 85 kW or 150 kW, and can travel up to 480 km (298 miles) on a full charge.

Meanwhile, the eSprinter is the all-rounder for range and loading volume. Built in Düsseldorf, it comes in two lengths and three battery sizes, with a range of up to 484 km (300 miles). It boasts up to 14 cubic meters of cargo space and can handle a gross weight of up to 4.25 tonnes.

Read more: Amazon places its largest-ever order for electric semi trucks


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BYD is flooding Europe with new EVs faster than any other carmaker has

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BYD is flooding Europe with new EVs faster than any other carmaker has

It already outsold Tesla in the UK and Europe, but this could be just the start. BYD said it’s launching new vehicles, including EVs, faster than any carmaker in Europe has done so far.

BYD goes all in on Europe with new EVs, PHEVs

BYD took the spotlight earlier this month after launching its most affordable EV in Europe so far. The Dolphin Surf, a rebadged version of the Seagull EV sold in China, starts at just £18,650 (just over $25,000) in the UK.

At a UK launch event, Alfredo Altavilla, BYD’s special advisor for Europe, said (via Autocar) the “Dolphin Surf was the missing piece in the A/B-segment.”

It will compete with entry-level EVs, such as the Dacia Spring, the UK’s cheapest EV, which starts at £14,995 ($20,000).

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Yet, the low-cost Dolphin Surf is only one piece of BYD’s master plan. “We have been launching six cars in less than a year,” Altavilla explained, adding, “We are covering all of the most important segments of the European car market.”

BYD-EVs-Europe
BYD Dolphin Surf EV for Europe (Source: BYD)

Altavilla even boasted that, “I have zero problem in saying I don’t think there has ever been such a product offensive done in Europe as the one BYD is doing.”

Although BYD is best known for its low-cost EVs, like the Seagull, which starts under $10,000 in China, the auto giant is quickly expanding into new segments.

BYD-EVs-Europe
BYD Denza Z9 GT (Source: Denza)

BYD sells luxury vehicles under the Denza Yangwang brands. Denza is BYD’s answer to Porsche and other German luxury brands. Meanwhile, Yangwang is an ultra-luxury brand that will serve as BYD’s tech beacon.

According to Altavilla, this could be just the start. “We’re going to get together again after the summer break for another important reveal, and through the end of the year, there will be others,” BYD’s special advisor for Europe said.

BYD-EVs-Europe
BYD “Xi’an” car carrier loading EVs and PHEVs for Europe (Source: BYD)

BYD is set to begin production at its new plant in Hungary by the end of the year, enabling the company to customize vehicles for buyers in the region.

“As we go forward into 2026, more and more of the BYD line-up will be specific to this region,” Altavilla explained.

In separate news, BYD announced on Monday that its “Xi’an” car carrier is loaded and ready to ship off to the UK, Italy, Spain, Belgium, and other countries, carrying about 7,000 EVs and PHEVs.

Electrek’s Take

In what was called a “watershed moment,” BYD registered more vehicles in Europe than Tesla for the first time in April.

It also had more vehicle registrations in the UK than Tesla last month, with the Seal U taking the top spot for the most popular plug-in hybrid.

With the Dolphin Surf arriving, local production set to come online later this year, and several new models on the way, BYD is laying the groundwork to capture its share of the European auto market.

According to S&P Global Mobility forecasts, BYD is expected to more than double its sales in Europe this year, with around 186,000 vehicles sold. By 2029, BYD’s sales could double again to around 400,000. Between its plants in Hungary and Turkey, China’s EV leader is expected to have a combined capacity of 500,000 units.

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