EU: Shipping companies to surrender allowances for verified emissions

Photo: 149816317 © Michele Ursi |

The EU reached a political agreement on Sunday on important legislative proposals of the ‘Fit for 55’ package, and agreed to include maritime shipping emissions within the scope of the EU Emissions Trading System (ETS). Under the new agreement, shipping companies are “obliged to surrender allowances for verified emissions”. In other words, companies will need to pay for shipping emissions.

The agreement on the EU Emissions Trading System, which on Sunday was extended to shipping, is key to the European Union’s bid to become the world’s first carbon-neutral continent. The Council and Parliament agreed on a gradual introduction of obligations for shipping companies to surrender allowances: 40% for verified emissions from 2024, 70% for 2025 and 100% for 2026.

Most large vessels will be included in the scope of the EU ETS from the start. Big offshore vessels of over 5000 gross tonnage and above, will be included in the ‘MRV regulation’ on the monitoring, reporting and verification of CO2 emissions from maritime transport regulation from 2025 and in the EU ETS from 2027. General cargo vessels and off-shore vessels, between 400-5 000 gross tonnage, will be included in the MRV regulation from 2025, and their inclusion in EU ETS will be reviewed in 2026.

In addition, the agreement takes into account geographical specificities, and proposes transitional measures for small islands, ice class ships, and journeys relating to outermost regions and public service obligations, and strengthens measures to combat the risk of evasion in the maritime sector.

Certain member states, with a relatively high number of shipping companies, will in addition receive 3.5% of the ceiling of the auctioned allowances to be distributed among them.

The co-legislators agreed to include non-CO2 emissions (methane and N2O) in the monitoring, reporting and verification (MRV) regulation from 2024 and in the EU ETS from 2026.

It is worth mentioning that the deal on EU emissions trading system and the Social Climate Fund is provisional pending formal adoption, in both the Council and the European Parliament.

Disclaimer for podcasts and articles

When you view, access or otherwise use our podcasts or articles, you acknowledge the application of this disclaimer:

Shipping Telegraph ApS provides no warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in our podcasts or articles. The information, opinions, recommendations, content, etc. presented in our podcasts or articles are for information purposes only and do not constitute or replace professional advice. Any reliance you may place on the information provided in our podcast or articles is strictly at your own risk.

Unless it is specifically stated, Shipping Telegraph ApS does not approve, recommend or certify any product, process, service, organization, etc. presented or mentioned in our podcasts or articles. Any third-party materials, advertisements or content of any third-party referenced in our podcasts or articles do not necessarily reflect the opinions, standard or policies of Shipping Telegraph ApS, and Shipping Telegraph ApS cannot be held accountable hereof. Shipping Telegraph ApS is not responsible or liable for the accuracy, completeness or compliance with applicable laws of any third-party material, advertisements and content.

Shipping Telegraph ApS shall not be responsible for any errors or omissions contained in the podcasts, the articles or the website used to gain access hereto and reserves the right to make changes without notice. Shipping Telegraph ApS makes no warranty that our podcasts or articles, or the server making them available, are free of viruses, worms, etc.

Shipping Telegraph ApS expressly disclaims any and all liability or responsibility for any direct, indirect, punitive, incidental, consequential or other damages or other claims arising out of or in connection with any individual's and business entity's use of, reference to, reliance on our podcasts or articles or the information presented herein. By ticking the box, I agree with the disclaimer above.