As of April 18th, the European Council approved the final text for the inclusion of shipping under the EU ETS, starting from January 2024. The final legislative text is expected to be published on the European official Journal before the summer and will enter into force within 20 days from publication.
Yes. Ships calling at EU ports will be subject to the EU ETS, regardless of the flag and where the owner of the ship is incorporated. The EU ETS will apply to 100% of emissions from intra-EU voyages and emissions at berth in the EU. For voyages that start or end outside of the EU, 50% of emissions will be included in the EU ETS. Vessels below 5000 GT won’t be included from 2024.
The shipowner or any other organization or person who assumes responsibility for the operation of the ship is responsible for complying with the International Management Code for the Safe Operation of Ships and for Pollution Prevention, set out in Annex I to Regulation (EC) No 336/2006 of the European Parliament and of the Council.
For shipping companies registered outside the EU, the administering authority should be the Member State in which the shipping company has had the most port calls within the last two years. For shipping companies registered in a third country and which did not perform any voyage to/from the EU in the last two years, the authority should be the Member State from where the shipping company had terminated its first voyage under the ETS scope.
Yes, to participate in the EU Emissions Trading System (ETS), your shipping company must open an account in the Union Registry. You can request to open an account by submitting supporting documentation to your country’s national administrator who will collect and verify the information.
Ships subject to the EU ETS must use EU Allowance (EUA) certificates to account for their emissions. EUAs are certificates specifically created by the European Union for the ETS Scheme and can be obtained by various sectors such as industrial and aviation.
EUAs are regulated financial instruments under the MIFID II regulation. Licensed financial intermediaries who have direct access to official exchanges and the over-the-counter (OTC) markets can procure EUAs.
Cargo/passenger ships over 5000 G.t will be subject to a phase-in period of 40% in 2024, 70% in 2025, and 100% in 2026. Offshore vessels over 5000 G.t will be subject to a phase-in period of 100% in 2027. Cargo/passenger ships and offshore vessels between 400 and 5000 G.t will also be subject to a phase-in period of 100% in 2027.
The EU-MRV regulations refer to a regulation implemented by the EU in 2018 that requires ships with 5,000 gross tonnage or more, calling at EU ports, to monitor and report their fuel consumption and carbon dioxide emissions during EU-related voyages. This regulation is formally known as the Regulation (EU) 2015/757 and requires these ships to prepare a monitoring plan and an emission report that will be verified by an EU-accredited verifier.
Shipping companies must begin monitoring their emissions from January 1, 2024. The monitoring period ends on December 31, 2024, and emission verification must be completed by March 31, 2025. EUAs units for 2024 must be surrendered by September 30, 2025.
Failing to surrender yearly allowances will result in a penalty of 100 €/ton, the standard for EU ETS operators. If a shipping company fails to surrender allowances for two or more consecutive reporting periods, an expulsion order may be issued against the ships for which it is responsible. The Member State can detain the ships and deny them entry into ports under its jurisdiction, other than the flag state.
