EU ETS Maritime Emissions: How Payments Work, When They are Due, and What Ship Operators Need to Know

Featured photo by Tomris

The European Union Emissions Trading System (EU ETS) has entered a new era by extending its scope to maritime transport. This change marks a significant step toward reducing greenhouse gas emissions from shipping, one of the most challenging sectors to decarbonize. If you operate vessels calling at European ports, understanding how payments are made, when they are due, and where compliance happens is essential for avoiding penalties and managing costs effectively.

In this comprehensive guide, we’ll explain:

• What the EU ETS means for shipping companies
• When payments must be made
• How and where payments are processed
• The phase-in schedule and cost implications
• Practical tips for compliance
• An interactive cost calculator to estimate your obligations

What Is the EU ETS and Why Does It Apply to Shipping?

The EU ETS is the world’s largest carbon market, designed to reduce greenhouse gas emissions by putting a price on carbon. It operates on a “cap-and-trade” principle: companies receive or buy emission allowances (EUAs), and each allowance permits the emission of one tonne of CO₂. If a company emits more than its allowance, it must purchase additional EUAs or face penalties.

Until recently, the EU ETS covered sectors like power generation and heavy industry. Starting January 1, 2024, maritime transport was added to the system. This means cargo and passenger ships of 5,000 gross tonnage (GT) or more calling at EU ports are now subject to carbon pricing.

Which Emissions Are Covered?

Currently, the EU ETS for shipping covers carbon dioxide (CO₂) emissions from fuel combustion. From 2026 onward, it will also include methane (CH₄) and nitrous oxide (N₂O), making compliance even more critical.

The scope includes:

• 100% of emissions for voyages between EU ports.
• 50% of emissions for voyages starting or ending outside the EU.
• All emissions while ships are at berth in EU ports.

When Do Shipping Companies Pay?

Payments under the EU ETS are not made at the port. Instead, compliance follows an annual cycle:

1. Monitoring and Reporting
   Each shipping company must monitor fuel consumption and calculate emissions according to EU MRV (Monitoring, Reporting, Verification) rules.
2. Verification
   An accredited third party must verify emissions data.
3. Surrendering Allowances
   Companies must surrender EUAs equal to their verified emissions for the previous calendar year by 30 September each year.

For example:

• 2024 emissions → allowances surrendered by 30 September 2025.
• 2025 emissions → allowances surrendered by 30 September 2026.

Phase-In Schedule

To ease the transition, the EU introduced a gradual phase-in:

• 2024: 40% of verified emissions covered.
• 2025: 70% of verified emissions covered.
• 2026 onward: 100% of verified emissions covered.

This means costs will rise significantly over the next two years.

How and Where Are Payments Made?

Payments are not physical transactions at ports. Instead, they occur through the EU carbon market and compliance systems:

• Buy EUAs
  Shipping companies purchase EU Allowances on carbon trading platforms such as the European Energy Exchange (EEX) or through brokers.
• Union Registry
  Each company has an account in the Union Registry, an electronic system managed by the EU. This is where allowances are surrendered.
• National Administrators
  Compliance is overseen by the country’s national authority where the company is registered.

Penalties for Non-Compliance

Failing to surrender allowances results in a penalty of €100 per excess tonne of CO₂, plus the obligation to make up the shortfall. Repeated violations can lead to bans from EU ports. Compliance is not optional—it’s a legal requirement.

Cost Impact: What Does It Mean for Ship Operators?

The cost depends on:

• Annual CO₂ emissions
• EUA price per tonne
• Phase-in percentage

Current EUA prices hover around €80–€90 per tonne, but analysts predict they could exceed €100 by 2030.

Example:

• A container ship emitting 10,000 tonnes of CO₂ annually:
  • 2024: 40% × €85 × 10,000 = €340,000
  • 2025: 70% × €85 × 10,000 = €595,000
  • 2026: 100% × €85 × 10,000 = €850,000

Interactive EU ETS Cost Calculator

We’ve created a simple calculator to help you estimate your compliance costs. Enter your annual emissions and current EUA price, and select the year to see your estimated cost.

Practical Tips for Compliance

1. Start Early
   Don’t wait until September. Begin purchasing allowances gradually to avoid price spikes.
2. Monitor EUA Prices
   Prices fluctuate based on market conditions. Lock in purchases when prices are favorable.
3. Improve Efficiency
   Reducing fuel consumption lowers emissions and costs. Consider slow steaming, hull cleaning, and energy-saving technologies.
4. Plan for 2026
   Full coverage and additional gases will significantly increase costs. Budget accordingly.

Looking Ahead: FuelEU Maritime and IMO Regulations

In addition to EU ETS, the FuelEU Maritime regulation started in January 2025, requiring ships to reduce the greenhouse gas intensity of their fuel mix. Globally, the International Maritime Organization (IMO) plans to introduce carbon pricing mechanisms by 2027. Compliance strategies should consider both regional and global rules.

Key Takeaways

• EU ETS applies to ships calling at EU ports since January 2024.
• Payments are made by purchasing and surrendering EUAs via the Union Registry.
• Deadlines: 30 September each year for the previous year’s emissions.
• Costs will rise as coverage increases from 40% (2024) to 100% (2026).
• Non-compliance leads to heavy fines and possible port bans.

Ready to calculate your costs? Use our interactive calculator and start planning your compliance strategy today.