Freight Investor Services is to launch a new office in Copenhagen, Denmark, that will be the focal point of its "green" freight and commodity products.
The broker, which specialises in freight derivatives plus bulk commodities, told TradeWinds that the brand new office will initially focus on carbon trading, but hopes to branch out into a wider range of "green" products.
These could comprise battery metals and future developments like "green" ammonia as part of FIS' current fertiliser broking business, a spokesperson for the firm told TradeWinds on Monday.
The offering could also include the European Energy Exchange (EEX)'s new zero-carbon index, FIS said. The index, which shows the cost of carbon to dry cargo shipping, was announced in June and launched on Monday.
FIS told TradeWinds it hopes to open the new Copenhagen office by the end of 2021, but has no firm launch date.
It has yet to finalise whether it will make new hires or move brokers across to Denmark from its London headquarters or other offices.
John Banaszkiewicz, FIS founder and chief executive, said the firm wants to help its clients prepare for their transition to a lower carbon future.
"We are building on FFAs [forward freight agreements] to FFEs [freight, fuel, emissions], we can offer clients information and contracts for compulsory and voluntary carbon credits on top of our broad range of freight and commodity contracts," he explained.
Emissions trading in the EU
"Maritime is an industry under focus as it looks set to be added into the EU ETS," said Banaszkiewicz.
"Globally the shipping industry emits just over 1bn tonnes of carbon a year, or around 3% of total world emissions, and will be under pressure to go green."
Banaszkiewicz has a track record in broking innovation going back over two decades, first in freight futures and then bulk commodities.
The European Union is due to formally release the outline of its proposed Emissions Trading System, or ETS, on Wednesday.
The EU's proposals, however, were leaked earlier this month, to which some shipowners reacted with dismay, as TradeWinds has reported.
"With a global market of around 35bn tonnes of carbon, Europe is looking to lead the way in emissions reductions with a target of reducing CO2 by 55% from 1990 levels by 2030," Banaszkiewicz added.
The EU Allowance (EUA) scheme is expected to be extended to the shipping industry from January 2023, when a three-year implementation period will commence ahead of the deadline for full compliance in 2026.
This will require European shipping to participate in the ETS and purchase allowances for emissions that exceed a certain allocated threshold.
It is also expected that this scheme will apply to ships from outside the EU calling at European ports.
FIS noted that the price for carbon has been increasing "significantly" since the start of 2020.
The price has risen by 135% from €24.58 ($29.13) at the start of 2020 to a high of nearly €58 in July 2021, the brokerage said.
When asked why the firm chose Denmark as its new "green" base, FIS said: "The area is buzzing with new innovations on the environmental front, and we want to be part of such an exciting and fast-paced atmosphere."
Denmark is also a member of the EU, whereas the UK — where FIS is headquartered — has exited the bloc.
