EEX launches Zero Carbon Freight Index

The European Energy Exchange (EEX) has today (12 July) launched its new Zero Carbon Freight Index (ZCFI).

The index enables players in the Dry Freight market to see, for the first time, how the cost of carbon emissions could affect freight prices.

The ZCFI comes as the EU prepares to unveil legislation this week, which is likely to include the extension of the EU ETS to the maritime sector. Once these rules are in place, ship owners and operators will be required to take part in the EU Emissions Trading Scheme (ETS). As a consequence, the shipping industry will now have to factor in the cost of carbon when conducting voyages that call at EU ports.

By referencing the ZCFI, EEX says market participants will have a new reference point, which they can use to calculate the cost of their carbon exposure, thereby giving a ‘clearer, more indicative picture’ of their overall transportation cost.

The new EEX Zero Carbon Freight Index calculates the synthetic price of daily FFA timecharter rates for both Capesize and Panamax vessels, which are adjusted for the cost of carbon. Price information is taken from the highly liquid EEX Dry Freight FFA market which is then combined with EEX EUA Futures to create a daily ‘Zero Carbon FFA’ rate which reflects a 100% carbon reduction.

‘As a major player in both the freight and carbon markets, EEX has a duty of care and a responsibility to help our customers navigate through the decarbonisation process and ensure that they manage their exposure effectively,’ said Steffen Koehler, EEX – Chief Operating Officer.

‘Through our new Zero Carbon Freight Index, we are actively helping our customers and the wider shipping industry in real terms, by providing credible, reliable data which in turn, helps players make better and more informed trading decisions today and in the future.’

The EEX Zero Carbon Freight Index is available via

Rhys Berry