EU ETS Anchors Shipping Emissions

ShippingImage Source: SteelGuru


Starting in 2024, large ships weighing over 5,000 gross metric tons will be included in the EU's Emissions Trading System (EU ETS). Ships will be required to pay for a percentage of their emissions, with the cost likely being passed on to cargo owners through surcharges.


In a landmark decision, the European Union has announced that the shipping industry will be included in its Emissions Trading System (EU ETS) starting from 2024. The inclusion aims to regulate emissions from large ships of 5,000 gross metric tons and above when they enter EU ports.

Ships that have voyages either starting or ending outside of the EU will be required to pay for 50% of their emissions. On the other hand, those operating solely between EU ports or docked at EU ports will need to pay for 100% of their emissions.

The EU ETS initially plans to cover emissions of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). However, the last two gases will only be included starting in 2026. This gives shipping companies a transition period to adjust to the new regulations.

The emissions payments will be implemented in phases. For the first year, companies will need to pay 40% of their reported emissions, which will increase to 70% in 2025 and 100% from 2027 onwards. This stepped approach is designed to ease the industry into compliance.

This move is not without financial repercussions. The additional costs incurred by shipping companies due to these new regulations will most likely be transferred to cargo owners in the form of surcharges. This could lead to increased prices for goods transported by sea.


The inclusion of the shipping industry in the EU ETS is a significant step in reducing maritime emissions. While the phased implementation allows for gradual compliance, the additional costs are expected to be passed on to cargo owners, potentially affecting the price of goods. The long-term impact of this decision remains to be seen but it marks a critical move in the EU's commitment to combat climate change.

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