The EU ETS has been progressively incorporating maritime emissions since 2024. The basis is the revised ETS Directive (Directive 2003/87/EC, amended by Directive 2023/959/EU), which includes the maritime sector from 1 January 2024. Introduction is phased: in 2024, 40 % of verified emissions must be covered by allowances; in 2025, 70 %; from 2026, the full 100 % applies.
Geographically, the ETS captures all emissions from voyages between EU/EEA ports (intra-EU: 100 %) and 50 % of emissions from voyages between an EU/EEA port and a third-country port. Vessels above 5,000 GT calling at EU/EEA ports are affected – regardless of flag. The responsible entity is the “shipping company” as defined by the MRV Regulation (Regulation 2015/757), typically the ISM Company or the Registered Owner.
For technical departments the critical point is this: the data basis for the ETS obligation comes directly from onboard operations. Bunker reports, logbook entries, tank soundings and fuel analyses form the basis of the annual MRV emission reports, which are checked by accredited verifiers. Errors in data collection have a direct impact on the allowance obligation.
Capture emissions according to MRV rules, have them verified and surrender allowances on time. In detail, the annual compliance cycle comprises the following steps:
1. Monitoring Plan: Every vessel needs an approved Monitoring Plan that defines the emission recording method. For most vessels, Method A (BDN-based, Bunker Delivery Note) or Method B (tank measurements) is relevant. The plan must be updated when changes occur (ownership change, system modifications).
2. Onboard data collection: The crew records fuel consumption, voyage data and port calls daily. Data quality is critical – inconsistencies between logbook, BDNs and tank measurements lead to verifier findings. Digital systems (noon report software, sensor-based monitoring) improve data quality but do not replace manual checks.
3. Annual verification: By 31 March each year, the emission report for the previous year must be reviewed and confirmed by an accredited verifier. The verifier checks data consistency, compliance with the Monitoring Plan and correct emission calculations.
4. Allowance surrender: By 30 September each year, the corresponding EU emission allowances (EUAs) must be surrendered through the Union Registry. Allowances are acquired on the secondary market or via auctions. Price development is volatile – the average price in 2025 was approximately EUR 65–75/t CO2.
5. Document of Compliance: After successful verification and allowance surrender, the vessel receives a Document of Compliance that must be presented during Port State Control inspections. If it is missing, entry bans to EU ports may be imposed.
ETS costs depend not only on allowance prices but also on routing, fleet deployment and efficiency. The financial burden per vessel varies considerably:
A Capesize bulker emitting 25,000 t CO2 annually and completing 60 % of its voyages as EU intra or EU-third country journeys faces an annual ETS burden of approximately EUR 1.05 million at an allowance price of EUR 70/t. With rising prices and the transition to 100 % coverage from 2026, this figure can exceed EUR 1.5 million.
Route optimisation: The 50 % rule for extra-EU voyages creates an incentive for route optimisation. Transshipment via non-EU ports (e.g. Tanger Med, Port Said) can reduce the ETS burden but is logistically demanding and costs transit time. The EU has recognised this “carbon leakage” effect and is working on countermeasures.
Speed management: Slower steaming reduces fuel consumption and thus ETS-liable emissions. A 10 % speed reduction lowers consumption by approximately 27 % (cubic relationship). However, voyage time increases, which affects charter contracts and cargo schedules.
Allowance procurement: The timing of purchases significantly affects costs. EUA prices fluctuate; a hedging strategy (forward purchases, options) can reduce price risk but requires financial expertise that is not present in many shipping companies.
Cost allocation: In charter parties, who bears the ETS costs is often not clearly regulated. BIMCO has published ETS clauses, but many existing contracts contain no corresponding provisions. This leads to disputes, particularly in time-charter arrangements.
Frequent weaknesses include an unclear definition of the responsible shipping company and delayed registry processes. The most common mistakes in detail:
Incorrect assignment of responsibility: The EU ETS defines the “shipping company” as the entity responsible under the ISM Code. In complex management structures (owner, manager, charterer), it is often unclear who must be registered. Delayed clarification leads to compliance gaps.
Delayed registry opening: The Union Registry account must be opened through the responsible Administrating Authority. The process takes 4–8 weeks and requires identity verification. Operators who start too late cannot surrender allowances on time.
Inconsistent data: When BDN quantities, tank measurements and logbook entries do not match, the verifier raises findings against the emission report. Correction takes time and can jeopardise deadlines.
Missing integration in charter parties: Many operators have not incorporated ETS costs into existing contracts. With rising allowance prices, this becomes a financial risk if costs cannot be passed through to the charterer.
Underestimating penalties: Failure to surrender allowances incurs a penalty of EUR 100 per missing allowance – in addition to the obligation to deliver. After two consecutive years of non-compliance, an entry ban to EU ports may be imposed.
The technical department is the key to ETS compliance because the entire emissions calculation is based on operational data. The quality chain starts at bunker delivery and ends at the verified emission report:
BDN management: Bunker Delivery Notes are the primary evidence instrument. They must contain the delivered quantity, density and sulphur content. Discrepancies between BDN and tank sounding are common and must be documented and explained. A tolerance of 0.5 % is customary; beyond that, corrections are required.
Tank measurement systems: Automatic sounding tables are more accurate than manual measurements but require regular calibration. An error of 1 % in inventory determination on a vessel with 3,000 t fuel tanks means a deviation of 30 t – at 3.1 t CO2 per tonne of HFO, that is 93 t CO2, corresponding to 93 allowances or approximately EUR 6,500.
Emission factors: Standard emission factors are defined in the MRV Regulation (3.114 t CO2/t HFO, 3.206 t CO2/t MDO). When alternative fuels are used (LNG, methanol), different factors apply, and the well-to-wake methodology may include additional upstream emissions.
Digital systems: Modern noon report systems and sensor-based monitoring (flowmeters, exhaust gas analysers) can significantly improve data quality. They do not, however, replace the diligence of the crew and superintendent in data validation. The verifier checks not the software but the plausibility of the reported data.
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