Shipping emissions under the European Union Emissions Trading System
The European Union Emissions Trading System (EU ETS) is expanding to include the maritime sector as part of its efforts to reduce greenhouse gas emissions. This update, which took effect in July 2023, introduces significant changes for the shipping industry. Ship owners and shipping companies will be subject to an emissions cap, with allowances auctioned within the ETS and with other markets to encourage reductions across applicable sectors. The scope of this policy covers 100% of emissions from intra-EU voyages, and 50% emissions from extra-EU voyages, with special rules to prevent evasion. Revenue generated from the maritime sector’s inclusion will primarily support decarbonization efforts, innovation, and the transition to alternative fuels.