EU Emissions Trading System Extended to Shipping

The European Union has extended its Emissions Trading System (ETS) to include the shipping industry, effective January 1, 2024, making it the first governmental authority to introduce financial incentives for shipping companies to accelerate sustainable operations. The expansion represents a significant step toward the EU's net-zero emissions goal by 2050.

Ferry operators will be required to purchase carbon allowances for a portion of their total emissions during an initial phase-in period: 40% in 2024, 70% in 2025, and eventually reaching 100% coverage by 2026. This graduated approach allows the maritime industry time to adapt to the new regulatory framework while progressively increasing environmental accountability.

The inclusion of shipping in the ETS follows the COP26 UN climate change conference, which initiated global momentum around climate action. While maritime transport represents approximately 3% of total carbon emissions from human activities, the sector plays an essential role in global supply chains and passenger travel.

Ferry and shipping companies will implement ETS-related surcharges for customers starting in 2024, with transparent specification of these costs. The system creates economic incentives for the maritime industry to increase investments in new technologies and sustainable fuel alternatives, including biodiesel, sustainable methanol, battery electrification, and other cost-competitive sustainable liquid fuels for challenging-to-electrify routes.