TL;DR: The EU Emissions Trading System has covered shipping since January 2024. Ships of 5,000 GT and above must surrender one EU Allowance (EUA) for each tonne of CO2 emitted on voyages within the EU and at berth in EU ports, and for half the emissions on voyages into or out of the EU. Coverage phased in at 40% of emissions for 2024 and 70% for 2025, and sits at 100% from 2026, with methane and nitrous oxide added from 2026. At an illustrative EUA price of €70, a single intra-EU voyage burning 2,500 tonnes of fuel carries an ETS cost of roughly €550,000. Who pays depends on the charter: the legal obligation sits with the shipping company, but contracts increasingly pass the cost to the charterer.
What is the EU ETS?
The EU Emissions Trading System is a cap-and-trade system: a shrinking cap on total emissions, with tradeable allowances (EUAs) that emitters must buy and surrender, one per tonne of CO2. The cap falls each year, so allowances become scarcer and the price of emitting rises over time.
Shipping entered the system in January 2024. For a shipowner or operator, that turns every tonne of fuel burned on an in-scope voyage into a direct, market-priced cost line alongside the fuel itself, settled annually against verified EU MRV emissions data.
Which ships and voyages are in scope
Scope is defined by the voyage and the port, not the flag or where the company is based. The essentials:
Worked example: the ETS cost of one voyage
Take a vessel on an intra-EU voyage under 2026 rules (100% coverage) burning 2,500 tonnes of VLSFO:
- Step 1: CO2. 2,500 t fuel × 3.151 (VLSFO emission factor) = 7,878 t CO2.
- Step 2: allowances. 100% coverage means 7,878 EUAs to surrender.
- Step 3: cost. At an illustrative EUA price of €70: 7,878 × €70 = roughly €551,000.
The same voyage arriving from outside the EU counts only 50% of its emissions: roughly €276,000. In short: voyage ETS cost = fuel burned × emission factor × coverage % × EUA price.
The practical point is that ETS cost is now a meaningful share of the voyage bill, it varies with routing and speed, and it moves daily with the EUA market. It belongs in the voyage P&L at the planning stage, not in a year-end reconciliation.
Who pays: the owner or the charterer?
The regulation places the compliance obligation on the shipping company: the registered owner, or the ISM manager where responsibility has been formally delegated. But the commercial cost is a separate question, and it follows the charter:
The clean answer: the legal obligation sits with the shipping company; the commercial cost follows whoever controls how the ship trades, which contracts increasingly make the charterer. Disputes arise where clauses are missing or vague, which is why voyage-level emissions data that both parties trust has become part of the negotiation itself.
How to manage EU ETS cost
- See the cost per voyage, before the voyage. Model EUA exposure at the planning stage so routing and speed decisions include carbon, not just fuel. That is built into voyage optimisation.
- Price it into bunker decisions. Two fuel quotes with the same $/mt can carry different total costs once ETS exposure per grade is counted; see sustainable bunker supply for how compliant fuels change the maths.
- Keep an auditable emissions record. Surrender obligations are settled against verified EU MRV data, so the reporting chain from vessel reports through validation to verification is where compliance is won or lost. That is what ZeroNorth Emission Analytics provides, with charterer-side reporting covered by Scope 3.
- Allocate between parties with data both sides trust. Per-voyage, per-charter emissions statements prevent ETS cost disputes between owners and charterers.
EU ETS, FuelEU and CII: how they fit together
Three regimes now price or rate the same tonne of fuel. The EU ETS prices the CO2 emitted. FuelEU Maritime penalises fuels above a falling GHG-intensity limit. The IMO's CII rates annual carbon intensity from A to E. They stack rather than replace each other, which is why per-voyage emissions data has become the common currency of compliance.
The bottom line
The EU ETS has made carbon a market-priced line on every in-scope voyage: measurable, forecastable and negotiable, but only for operators who can see it per voyage rather than per year. The desks that manage it well model EUA exposure before fixing, price carbon into fuel and routing choices, and settle owner-charterer allocation with data both sides trust. That is exactly what ZeroNorth Emission Analytics is built for.
Book a demo to see per-voyage EU ETS exposure inside one platform.
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