The EU ETS maritime extension brings shipping into Europe's cap-and-trade carbon market for the first time. Adopted as part of the "Fit for 55" package through a revision of the ETS Directive (Directive 2003/87/EC, amended by Directive (EU) 2023/959), it requires shipping companies to surrender EU allowances (EUAs) for verified CO2 emissions from voyages involving EU and EEA ports.
The scope covers cargo and passenger ships of 5,000 gross tonnage and above. Coverage of emissions is phased in:
- 40% of reported emissions for 2024
- 70% for 2025
- 100% from 2026 onward
For voyages between an EU port and a non-EU port, 50% of emissions count; for intra-EU voyages and at-berth emissions, 100% count. From 2026, methane (CH4) and nitrous oxide (N2O) are added alongside CO2. Offshore ships above 5,000 GT are included from 2027.
The "shipping company" — typically the ISM-defined Document of Compliance holder — is the regulated entity, though contractual pass-through to the commercial operator is permitted under Article 3gc. Compliance is administered by a single assigned administering authority per company, listed by the European Commission. Companies must monitor and report emissions under the existing EU MRV Regulation (Regulation (EU) 2015/757), which was amended to align with ETS scope.
The policy is controversial internationally. Several flag states and shipowner associations argue it conflicts with the IMO's preferred global approach, while the Commission maintains it complements ongoing IMO MEPC negotiations on a global maritime greenhouse gas pricing mechanism. China, Brazil, and others raised objections at the IMO and WTO. Revenue from auctioning maritime allowances flows mainly to member states, with a portion earmarked for the Innovation Fund to support clean maritime technologies.
Non-compliance triggers penalties of €100 per tonne of CO2-equivalent not surrendered, plus public naming and, after two consecutive years of non-compliance, potential expulsion orders barring ships from EU ports under Article 16(11a).
Example
In 2024, Maersk and MSC began purchasing EU allowances to cover 40% of CO2 emissions from voyages calling at Rotterdam, Hamburg, and other EU ports under the newly extended EU ETS.
Frequently asked questions
Cargo and passenger ships of 5,000 gross tonnage and above calling at EU/EEA ports. Offshore ships above 5,000 GT join in 2027. Smaller vessels remain outside the scheme for now.
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