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Quick Guide: Shipping's inclusion in the EU Emissions Trading System

The EU Emissions Trading System (EU ETS) is a key tool for combating climate change and reducing greenhouse gas emissions cost-effectively. The maritime industry was included in the emissions trading scheme in January 2024, and shipping companies are required to purchase EU Allowances for their carbon emissions. We sum up the key aspects of the EU ETS from a maritme perspective.
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May 5, 2023

The EU Emissions Trading System (EU ETS) is a key tool for combating climate change and reducing greenhouse gas emissions cost-effectively. The maritime industry was included in the emissions trading scheme in January 2024, and shipping companies are required to purchase EU Allowances for their carbon emissions. We sum up the key aspects of the EU ETS from a maritme perspective.

Shipping’s inclusion in the European Union’s Emissions Trading System (EU ETS) brought carbon pricing to the maritime sector in January 2024. Below, we sum up the main aspects of the maritime industry's inclusion in the trading system.

Maritime emissions eligible under the EU ETS

  • 100% of CO2 emitted from large ships operating between EU ports and at berth in EU ports.
  • 50% of CO2 emitted from ships sailing to and from EU ports.

There are no free allowances for the maritime industry. However, a phase-in period of requirements for the shipping industry is scheduled as follows:

  • 40 % of emissions reported in 2024 to be paid for in 2025
  • 70 % of emissions reported in 2025 to be paid for in 2026
  • 100 % of emissions reported in 2026 to be paid for in 2027

Ships included in the EU ETS

  • Cargo and passenger ships above 5000 grosse tonnes from 2024
  • Offshore ships above 5000 grosse tonnes from 2027
  • Offshore ship and general cargo ships between 400 and 5000 GT may be included at a later stage

Greenhouse gases included in the EU ETS

  • CO2 emissions from 2024
  • Methane and nitrous oxide from 2026

Are you wondering how the carbon cost will impact your fleet? Or do you have questions about the inclusion of shipping in the EU ETS? Sign up for our on-demand webinar.

THE EUROPEAN UNION'S EMISSIONS TRADING SYSTEM

The EU ETS is a key tool for EU  policy makers to combat climate change and for reducing greenhouse gas (GHG) emissions cost-effectively. It is the first largest and  longest running international system for trading emissions allowances. The  system today:  

  • operates in all EU countries plus Iceland, Liechtenstein and Norway,
  • limits emissions from more than 10 000 industrial and power installations, as well as airlines operating between these countries,  
  • covers around 50 % of the EU’s greenhouse gas emissions.

Since 2005 the EU ETS has set a cap on the total amount of GHG emissions that companies can emit each year. A fixed number of allowances, which are the currency of the carbon market, are issued. The  cap is reduced over time so that total emissions fall. Within the cap, installations buy or receive emissions, which they can trade with one another as needed.

An EU allowance, or an EUA, is a permit to emit 1 tonne of carbon  dioxide or its equivalent (CO2e). The price of the EUA fluctuates and can be followed at the European Energy Exchange (EEX).

Quick Guide: Shipping's inclusion in the EU Emissions Trading System

The EU Emissions Trading System (EU ETS) is a key tool for combating climate change and reducing greenhouse gas emissions cost-effectively. The maritime industry was included in the emissions trading scheme in January 2024, and shipping companies are required to purchase EU Allowances for their carbon emissions. We sum up the key aspects of the EU ETS from a maritme perspective.

Shipping’s inclusion in the European Union’s Emissions Trading System (EU ETS) brought carbon pricing to the maritime sector in January 2024. Below, we sum up the main aspects of the maritime industry's inclusion in the trading system.

Maritime emissions eligible under the EU ETS

  • 100% of CO2 emitted from large ships operating between EU ports and at berth in EU ports.
  • 50% of CO2 emitted from ships sailing to and from EU ports.

There are no free allowances for the maritime industry. However, a phase-in period of requirements for the shipping industry is scheduled as follows:

  • 40 % of emissions reported in 2024 to be paid for in 2025
  • 70 % of emissions reported in 2025 to be paid for in 2026
  • 100 % of emissions reported in 2026 to be paid for in 2027

Ships included in the EU ETS

  • Cargo and passenger ships above 5000 grosse tonnes from 2024
  • Offshore ships above 5000 grosse tonnes from 2027
  • Offshore ship and general cargo ships between 400 and 5000 GT may be included at a later stage

Greenhouse gases included in the EU ETS

  • CO2 emissions from 2024
  • Methane and nitrous oxide from 2026

Are you wondering how the carbon cost will impact your fleet? Or do you have questions about the inclusion of shipping in the EU ETS? Sign up for our on-demand webinar.