EU ETS for Shipping in 2026: Allowances, Costs & What to Do Now

What is the EU ETS?

The EU Emissions Trading System (EU ETS) is a cap-and-trade system that puts a price on CO₂ emissions. Regulated entities must surrender one EU Allowance (EUA) per tonne of CO₂ emitted. Shipping was included in the EU ETS from 1 January 2024 under the revised EU ETS Directive (Directive 2003/87/EC as amended by Directive (EU) 2023/959).

Unlike EU MRV (which is reporting-only), EU ETS has a direct financial cost: operators must purchase and surrender EUAs for their covered emissions. At current EU carbon prices of approximately €60–70/tonne, a 50,000 DWT bulker consuming 6,000 tonnes of HFO per year on EU voyages faces a cost of approximately €1.1–1.3 million per year at full phase-in.

Who is covered?

The EU ETS covers ships of 5,000 GT and above on:

• Intra-EU/EEA voyages: 100% of emissions covered (both legs)
• Extra-EU voyages: 50% of emissions covered (only the EU leg — from last non-EU port to EU port, or EU port to first non-EU port)
• At EU ports: 100% of emissions at berth

Who is the responsible entity?

The shipping company — defined as the shipowner or the person who has taken over responsibility from the shipowner under a Document of Compliance (DoC) — is the regulated entity under EU ETS. This follows the same definition as EU MRV.

In practice, the commercial operator bears the ETS cost under most voyage charter agreements, as the charterer controls the vessel's trading pattern and fuel consumption. Under time charter, the time charterer typically reimburses the shipowner for ETS costs as a separately itemised expense. Many standard charter party forms (BIMCO) have been updated to include EU ETS pass-through clauses.

How to calculate your EU ETS cost

The calculation has four steps:

1. Determine CO₂ emissions per voyage (from EU MRV data)
2. Determine which portion of each voyage is "covered" (intra-EU 100%, extra-EU 50%)
3. Multiply by the applicable phase-in percentage (40% for 2024, 70% for 2025, 100% from 2026)
4. Multiply by the EU ETS carbon price (EUA price at time of surrender)

Use our free EU ETS calculator to estimate your 2026 obligation by vessel type, fuel consumption, and route profile.

Key deadlines

• 31 March: Submit verified emissions report for prior year (same deadline as EU MRV)
• 30 September: Surrender EUAs for prior year's covered emissions

EUAs must be surrendered to the Maritime Operator Holding Account (MOHA) administered by the EU Registry. Operators must open a MOHA before their first surrender deadline.

Penalties for non-compliance

• Failure to surrender EUAs: €100 per tonne of CO₂ not covered, plus obligation to surrender the missing EUAs in the following period
• Expulsion order: After two consecutive non-compliant years, the ship may be refused entry to EU ports

How to reduce your EU ETS obligation

Strategies that reduce fuel consumption also reduce ETS cost directly:

• Speed optimisation remains the highest-impact operational measure
• Route planning to minimise time on EU-covered legs (note: rerouting specifically to avoid ETS may be scrutinised)
• Biofuels with verified GHG reduction: verified sustainable biofuels have a zero or reduced CO₂ factor under EU ETS rules
• Wind-assisted propulsion reduces fuel burn on relevant routes

VesselComply tracks your covered emissions in real time, forecasting your full-year ETS obligation so you can purchase EUAs at optimal timing rather than rushing before the September deadline.