Category: EU Emissions Trading System / Decarbonisation
The EU Emissions Trading System has been phasing in for shipping since 2024. That phase-in is over. From January 2026, shipping companies must cover 100% of their CO₂ emissions on EU voyages — and for the first time, methane and nitrous oxide are included too. The financial impact is significant and the compliance cycle is strict.
How the phase-in worked
| Year | CO₂ coverage required |
|---|---|
| 2024 | 40% |
| 2025 | 70% |
| 2026 | 100% |
From 2026, methane (CH₄) and nitrous oxide (N₂O) also fall under the ETS — not just monitoring. This is a new cost, particularly for LNG-fuelled vessels where methane slip during operation adds up fast.
What this costs
Allowance prices in 2026 are forecast at €60–€150 per tonne of CO₂. For an average bulk vessel trading within the EU, that translates to over €1.3 million per year in ETS costs at full coverage. Non-compliance carries fines on top of the outstanding obligation — and persistent non-compliance can result in a vessel being denied entry to EU ports.
Key dates to have in the diary
- 31 March each year — verified emissions report submitted for the previous year
- 30 June each year — valid Document of Compliance must be on board
- 30 September each year — allowances surrendered in the Union Registry (MOHA)
Special note for LNG operators
From 2026, LNG-fuelled vessels must install Continuous Monitoring Systems specifically to measure methane slip. This is a hardware requirement, not just a paperwork one. If this is not yet in place on affected vessels, it needs to be addressed immediately.
What to check now
- All vessels have an approved, up-to-date monitoring plan in THETIS-MRV — updated to include CH₄ and N₂O from 2026
- An accredited verifier is assigned early in the year to allow time for the 31 March report deadline
- The Document of Compliance is on board and valid
- LNG vessels have CMS installed and certified
Bottom line
The ETS is no longer a future concern — it is a live operational cost. Fleets without solid monitoring and reporting processes in place will face both financial penalties and administrative headaches at verification time.
