EU ETS Quickscan

Calculate EU ETS and fuel costs per reporting year, simply and accurately

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Easy to use Excel to determine Regulation for different scenarios. Includes all tables and information.

EU ETS Quickscan Tool Tutorial (Copy)

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EU ETS Maritime in a nutshell

EU ETS started covering emissions from maritime transport in 2024. Shipping companies covered by the EU ETS are required to have an approved monitoring plan for monitoring and reporting annual emissions. Every year, companies must submit an emissions report for each of the ships under their responsibility, as well an emissions report at company level (aggregating the ship data to be reported for ETS purposes). The data for a given year must be verified by an accredited verifier by 31 March of the following year (or by 28 February if so requested by the administering authority). Once verified, companies must surrender (use) the equivalent number of allowances by 30 September of that year.

Shipping companies are subject to obligations under the MRV Regulation since 2018. Data must be reported through THETIS-MRV, a platform operated by the European Maritime Safety Agency (EMSA) which enables, among other benefits, the publication of reliable data on ships’ emissions..

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Regulation in depth

• Requirements

  Have an approved monitoring plan for monitoring and reporting emissions as per EU MRV

  Shipping companies subject to EU ETS for shipping are required to make monitoring and reporting plans in accordance with EU MRV regulation. As part of this requirement, companies must submit an emissions report for each of the ships under their responsibility, as well an emissions report at a company level of all ships combined (the Company-level Emissions Report or CER). The data for a given reporting year must be verified by an accredited verifier by 31 March of the following year, or by 28 February if so requested by the administering authority.

  Surrender allowances on a yearly basis as per EU ETS

  Shipping companies subject to EU ETS are required to ‘surrender allowances’, also referred to as EU Allowances or EUA, corresponding to the previous year’s emissions by 30 September each year. The amount of allowances to be surrendered is based on the reporting done as per EU MRV in THETIS-MRV. Allowances can be purchased through the European Energy Exchange (EEX) as the primary market. The surrendering is to be done by transferring EU allowances from the Maritime Operator Holding Account (MOHA) of a shipping company to its Administering Authority.

  Shipping company requirements

  ·         Company shall register to an Administering Authority or EU/EEA Member State.

  ·         Company shall open a Maritime Operator Holding Account (MOHA).

  ·         Company shall update and submit monitoring plan within 3 months of first Port of Call.

  ·         Company shall submit an emissions report to Administering Authority by March 31 annually.

  ·         Company shall surrender allowances to Administering Authority by September 30 annually.

  ·         More details provided in the subsequent sections.

  EU MRV and Monitoring Plan requirements

  ·         In accordance with the framework of reporting under EU MRV Regulations.

  ·         Ship type, name, IMO number, shipowner and information of the shipping company.

  ·         Sources of energy used on board while in navigation and at berth.

  ·         Procedures for monitoring the fuel consumption of each fuel type.

  ·         Procedures for monitoring departure and arrival ports, including date and time.

  ·         Procedures for monitoring Well to Tank and Tank to Wake emission factors of energy.

  ·         Standards and characteristics of shore power or a zero-emissions technology.

  ·         Value of the established total electrical power demand of the ship at berth.

  ·         Shall be updated and assessed by verifier as appropriate[1].

  ·         All data shall be reported through THETIS-MRV, a platform operated by EMSA.

  Emissions Report requirements

  ·         Based on voyages, requires departure and arrival ports, including date and time.

  ·         Amount of fuel used while at berth and at sea.

  ·         Amount of electricity supplied to the ship using shore power (OPS).

  Verifier requirements

  ·         Verify yearly individual ship’s emissions report before February 28.

  ·         Verify yearly aggregated company emissions data report before March 31.

  [1]E.g. when changing owner, after refits, when new types of fuels are used etc.

• Applies to

  Ship types in scope

  Ship types covered EU ETS (payment of EUA) change over time:

  • From 2024: cargo and passenger ships of or above 5,000 GT                                       

  • From 2027: offshore ships of or above 5000 GT                                                                 

  • From 2027: offshore ships and cargo ships below 5,000 GT above 400 GT (to be decided)               

  Voyages in scope

  The share of emissions that must be covered by allowances is dependent on geography:

  • Voyages between EU/EAA and non-EU/EEA ports                                                50% of emissions

  • Voyages between EU/EAA ports                                                                             100% of emissions

  • Berthing in EU/EEA ports                                                                                           100% of emissions

  Greenhouse gasses in scope

  GHG types covered by EU ETS change over time:

  • From 2024:          CO2 only

  • From 2026:          CO2 + CH4 + N2O

  Phase-in approach

  The share of emissions that must be covered by allowances gradually increases each year:

  • Emissions in 2024 (surrendered in 2025): 40% of total emissions in the scope

  • Emissions in 2025 (surrendered in 2026): 70% of total emissions in the scope

  • Emissions in 2026 (surrendered in 2027): 100% of total emissions in the scope

• Exemptions

  Exemptions to EU ETS apply for certain voyages to outermost regions or some small islands, or to the benefit of ships using renewable fuels. Exemptions are subject to verification by the competent authority (verifier) of the member state of the port of call or any duly authorized entity, after consulting relevant entities where appropriate.

  Ice class

  shipping companies may surrender 5% fewer allowances than their ships of ice class IA, IA Super or an equivalent ice class, established based on recommendation of the Baltic Marine Environment Protection Commission (HELCOM), may surrender 5% fewer allowances than their verified emissions released until 31 December 2030. The reason for the difference in treatment is that such ships, due to their design, require more fuel to cover the same distance when traveling in the open sea or under ice conditions. This derogation applies regardless of whether the concerned ship sailed in ice conditions in a reporting year.

  Ships that connect small islands with mainland

  Until 31 December 2030, shipping companies are not obliged to surrender allowances for emissions released by passenger ships, other than cruise passenger ships, and by ferries (ro-pax ships) during certain voyages between ports of certain islands of a Member State and ports located in the same Member State.

  This exemption will only apply in respect of specific ports and islands that fulfil the conditions established in the ETS Directive, and upon request of the relevant Member State. For example, an eligible island must have a population of fewer than 200 000 permanent residents and must not have any road or rail link with the mainland.

  The list of ports and islands concerned by that derogation has been published on 22 December 2023 in the Official Journal of the EU. Please note that, in April 2024, three Finnish ports have been added to that list, via an amending Implementing Decision. The derogation also applies to those ports from 1 January 2024. Refer to the consolidated list of all islands and ports concerned by that derogation.

  Ships to outermost regions

  Until 31 December 2030, shipping companies are not obliged to surrender allowances for emissions released from voyages between a port located in an outermost region of an EU Member State and a port located in the same EU Member State (e.g. Lanzarote-Valencia), including voyages between ports within an outermost region (e.g. Lanzarote-Fuerteventura) and voyages between ports in the outermost regions of the same EU Member State (Guadeloupe-Martinique). In addition, shipping companies are not obliged to surrender allowances in respect of emissions released within the ports in relation to such voyages.

  Neighboring container transshipment ports

  To reduce the risk of evasion by container ships and the risk of relocation of container transshipment activities outside the EEA, the EU ETS includes a mitigation measure. According to that measure, stops by container ships at ‘neighboring container transshipment ports’ do not count to determine the start or the end of a voyage covered by the EU ETS.

  The European Parliament and the Council empowered the Commission to adopt implementing acts identifying the ‘neighboring container transshipment ports’. A port is to be identified as a ‘neighboring container transshipment port’ when this port meets three criteria set out in the ETS Directive: its share of transshipment of containers exceeds 65% of its total container traffic during the most recent 12-month period for which data is available; the port is located outside the Union but less than 300 nautical miles from a port under the jurisdiction of an EU Member State; the country of this port does not effectively apply measures equivalent to the ETS for that port.

  The Commission adopted an Implementing Regulation on 26 October 2023, which identifies Tanger Med (Morocco) and East Port Said (Egypt) as ‘neighboring container transshipment ports’.

  This implementing act will be revised every two years.

  Excluded “port of calls” [1]

  The following port of calls are excluded and do not count as a voyage start or end:

  ·         Stops for the sole purposes of refueling,

  ·         Stops for obtaining supplies,

  ·         Stops for relieving the crew (other than an offshore ship),

  ·         Stops for going into dry-dock or making repairs to the ship and/or its equipment,

  ·         Stops in port because the ship is in need of assistance or in distress,

  ·         Ship-to-ship transfers carried out outside ports,

  ·         Stops for the sole purpose of taking shelter from adverse weather or rendered necessary by search and rescue activities,

  ·         Stops of containerships in the neighboring container transshipment ports listed in the corresponding implementing act.

  [1] A port of call is the port where a ship stops to load or unload cargo, to embark or disembark passengers, or where an offshore ship stops to relieve the crew.

• Calculation

  !          Full formula for EU ETS calculation can be found in the commission delegated regulation.

  !          Emission factors and GWP values are provided in Annex 1 to 2.

  !          Skip the reading and use the quickscan to determine costs at yearly level for your fleet.

  EU ETS Allowances (EUA) Calculation

  The legal basis for reporting and calculating emissions is determined by EU MRV. Emissions are calculated by multiplying fuel consumption with the corresponding emissions factors of the fuel. As one allowances gives the right to emit one metric ton of CO2,eq, this leads to the amount of allowances to be surrendered under EU ETS. This process is explained in detail in the subsequent sections, based on the following assumptions:

  ·         Only emissions of greenhouse gases covered by the EU ETS scope are considered .

  ·         Emission factors to be used are Tank to Wake factors from the combustion process.

  ·         Biofuels falling under the Renewable Energy Directive have CO2 emission factor of zero.

  ·         RFNBOs and RFCs are treated as biofuels by Sustainable Ships until more information becomes available.

  Emission Factors (Cf)

  For EU ETS, the relevant greenhouse gases that are measured are CO2, N2O and CH4. These emissions are converted into a single emission factor – also called a CO2 equivalent value –  by multiplying the Global Warming Potential (GWP) with the individual subcomponents of CO2, CH4 and N2O. In the case of LNG, methane slip is also taken into account when calculating CH4 emissions. The methodology for deriving the emission factors are described in EU C(2023) 6728 Annex I and resulting values for different fuel types are shown in Table 2.

  Default IPCC emission factors, taken from the 2006 IPCC Inventory Guidelines or subsequent updates of those Guidelines, shall be used unless fuel-specific emission factors identified by independent accredited laboratories using accepted analytical methods are more accurate. A separate calculation shall be made for each regulated entity, and for each fuel.

  Biofuels compliant with RED have a CO2 emission factor of zero (0) under the ETS. The slippage coefficient and emission factors for CH4 biogas cannot be zero-rated.

  Emission factors for Biofuels, RFNBOs and RFCs

  Emissions resulting from the combustion of sustainable biomass compliant with the sustainability criteria established by the Renewable Energy Directive have a CO2 emission factor of zero (0) under the ETS.

  The ETS also allows zero-rating of some other “renewable” fuels regulated by the Renewable Energy Directive, notably RFBOs (Renewable Fuel Biological Origin) and RCFs (Recycled Carbon Fuel). To be eligible for zero-rating, those fuels must comply with a certain level of GHG savings compared to conventional fossil fuels.

  The exact treatment of RFNBOs (Renewable Fuel Non-Biological Origin) and RCFs (Recycled Carbon Fuels) remains to be determined by the implementing legislation to be developed pursuant to Article 14 of the EU ETS Directive. Currently Sustainable Ships treats these as biofuels, assuming a CO2 emission factor of zero. 

  GWP values

  GWP (Global Warming Potential) values measure how much heat a greenhouse gas traps in the atmosphere over a specific time period, relative to carbon dioxide (CO₂). CO₂ has a GWP of 1, and other gases are compared to that value. If a specific greenhouse gas has a GWP value of 28, it traps 28 more heat than CO2.

  For EU ETS, the relevant greenhouse gases that are measured are CO2, N2O and CH4. As per the regulations, GWP values are determined by IPCC. Sustainable Ships adheres to the below GWP values when calculating EU ETS emissions. Please note that these values could change over time, significantly impacting amount of allowances to be paid. They can be changed and are continuously updated in the EU ETS Quickscan.

  (LNG) Slippage

  Slippage is the amount of unburned fuel that passes through the engine. This is commonly the case for LNG (dual fuel) engines, where a certain amount of LNG is not combusted and comes out of the exhaust in the form of CH4 emissions. As CH4 has a higher Global Warming Potential (GWP) opposed to CO2, this needs to discounted for in the calculations.

  Companies should indicate the emission factor of slipped fuel (slippage coefficient), as defined in point 1, Part A of Annex I to Regulation (EU) 2015/757. Slippage coefficients are dependent on the emission source class. The possibility to demonstrate actual values diverging from the default values presented in point 2, Part A of Annex I is subject to the same conditions and restrictions as the ones for the emission factors referred to under Table B.4.

  In the case of LNG, methane slip is also taken into account when calculating CH4 emissions. Different rates for methane slip are defined depending on the combustion system of the engine.

  ·         Where default slippage coefficients are not listed for a specific emission source class, companies should apply a slippage coefficient of zero.

  ·         The slippage coefficient and emission factors for CH4 for biogas cannot be zero-rated. Only CO2 emissions can be zero rated.

• Compliance

  Compliance to EU ETS means that the shipping company responsible has surrendered a sufficient amount of allowances before September 30 following the reporting year.

  Non-compliance to EU ETS means the shipping company responsible has not surrendered a sufficient amount of allowances (in time). The shipping company shall remain responsible for the surrendering of allowances, without prejudice to any contractual agreements with commercial operators of the ship or client.

  Penalties for non-compliance include:

  • Publication of the names of shipping companies.

  • Excess emissions penalty of €100 for each to of CO2eq emitted for which the shipping company has not surrendered allowances. Payment of the excess emissions penalty shall not release the shipping company from the obligation to surrender an amount of allowances equal to those excess emissions when surrendering allowances in relation to the following calendar year.

  • In case the shipping company has failed to comply with the surrender requirements for two or more consecutive reporting periods, and where other enforcement measures have failed to ensure compliance, the competent authority of the Member State of the port of entry may issue an expulsion order.

• Mitigation

  Assuming full mitigation of EU ETS is not achievable for ship types with activities falling within the regulatory scope, it can be stated that reduction of fuel consumption (and thereby emissions) is directly related to a cost reduction. The cost reduction measures are divided into the below three categories. The EU ETS Guide will discuss these subsequent sections about cost-effectiveness for each category with examples and tools to make a business case for you scenario.

  1. Operational measures (0.1 - 48%)

  2. Refit (up to 100%)

  3. Fuel change (up to 100%)

  EU ETS costs are assumed to be €65 per allowance for the purposes of making a business case.

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Frequently Asked Questions

Use the RegulAitor to quickly find what your are looking for

• How does the EU ETS work?

  The EU Emissions Trading System (ETS) is a ‘cap-and-trade’ system. A cap is a threshold, defining the total amount of greenhouse gases that can be emitted by the operators covered by the system. It is reduced annually, at fixed intervals, in line with the EU’s climate target.

  The ETS objective is to reduce emissions by 62% from 2005 to 2030.

  The cap is expressed in emission allowances, where one allowance gives the right to emit one tonne of CO2eq (carbon dioxide equivalent). Operators are not allowed to generate more greenhouse gas emissions than their allowances can cover. If they do, heavy fines are imposed. Companies covered by the EU ETS must surrender (use) EU allowances corresponding to their emissions in the Union Registry. For instance, if a company emits 10,000 tonnes of CO2 falling within the scope of the EU ETS Directive during a reporting period, that company needs to buy and surrender 10,000 allowances by 30 September of the following year. Emission allowances are auctioned, and companies can buy and sell them through secondary markets.

  The system allows flexibility for companies to cut their emissions in the most cost-effective way. Indeed, every year, companies are incentivized to reduce their emissions or to continue to pay for those emissions (i.e. to surrender the corresponding amount of allowances).

• What is the EU MRV regulation?

  EU MRV (Monitoring, Reporting and Verification) means the EU Regulation 2023/957 of the European Parliament and of the Council amending Regulation EU 2015/757 in order to provide for the inclusion of maritime transport activities in the EU Emissions Trading System and for the monitoring, reporting and verification of emissions of additional greenhouse gases and emissions from additional ship types.

  EU MRV is the system in place for the monitoring, reporting and verification of emissions for ships subject to both EU MRV and EU ETS. Ships of 5,000 GT and above calling at EU ports are required to submit a monitoring plan for their fuel consumptions and an emission report containing the records of their CO2 emissions for verification by an EU-accredited verifier.

  With the introduction of EU ETS for shipping, EU MRV regulations have been amended to expand the greenhouse gases subject to reporting and verification, as well as the ship types and sizes covered by the regulation. Emissions subject to EU ETS for shipping are verified in accordance with EU MRV regulations.

  As of 1 January 2025, companies must report emissions for the following ships:

  • Cargo and passenger ships of or above 5000 GT;

  • Offshore ships of or above 5000 GT;

  • Offshore ships and general cargo ships below 5000 GT but not below 400 GT.

  The EU MRV Maritime Regulation covers:

  • Carbon dioxide (CO2)

  • Methane (CH4) as of 2024

  • Nitrous oxide (N2O) as of 2024

  The EU ETS covers:

  • Carbon dioxide (CO2)

  • Methane (CH4) as of 2026

  • Nitrous oxide (N20) as of 2026

• How are emissions monitored, reported and verified?

  Shipping companies covered by the EU ETS are required to have an approved monitoring plan for monitoring and reporting annual emissions. Every year, companies must submit an emissions report for each of the ship under their responsibility, as well an emissions report at company level (aggregating the ship data to be reported for ETS purposes). The data for a given year must be verified by an accredited verifier by 31 March of the following year (or by 28 February if so requested by the administering authority). Once verified, companies must surrender (use) the equivalent number of allowances by 30 September of that year.

  Data must be reported through THETIS-MRV, a platform operated by the European Maritime Safety Agency (EMSA) which enables, among other benefits, the publication of reliable data on ships’ emissions. Find more information in the FAQ on the MRV Maritime Regulation.

  Member States will ensure that all shipping companies under their responsibility comply with the various obligations under the EU ETS. Member States will ensure that shipping companies under their responsibility surrender sufficient allowances in due time. Information about the compliance status of regulated entities will be derived from the Union Registry and be made accessible to the relevant authorities.

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References

EU - EU ETS Directive 2023/959 – establishing system for GHG emission allowance trading

EU - RED Directive 2023/2413 - promotion of energy from renewable sources

EU - EU MRV Regulation 2023/957 - monitoring, reporting and verification

EU - EU C(2023) 6728 Annex I - rules for monitoring GHG emissions and maritime transport

EU - EU Regulation 2023/2449 – template for monitoring plan and emissions report

EU - EU Decision 2-24/411 – list of shipping companies specifying administering authority

EU - EU ETS and MRV Maritime general guidance document

EU - FAQ – Maritime transport in EU Emissions Trading System (ETS)

EMSA - Webinar on the extension of ETS to maritime industry

ClassNK - EU ETS FAQs

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