In EU ETS maritime compliance, the figures 40%, 70% and 100% refer to the phase-in compliance ratio — the share of a company's applicable emissions that must be covered by surrendering EUAs.
According to the European Commission, shipping companies were required to surrender EUAs for the first time by 30 September 2025, covering 2024 emissions. The ratio then increases in steps: in 2025, companies surrender for 40% of 2024 emissions; in 2026, 70% of 2025 emissions; and from 2027 onwards, 100% of reported emissions.
It is important to note that 40%, 70% and 100% do not mean that companies may report only part of their emissions, nor that MRV monitoring data can be discounted.
Companies still need to monitor, report and verify emissions in full, in accordance with the MRV and EU ETS requirements. The compliance ratio is applied only after the applicable emissions have been confirmed, as a factor used to calculate the final quantity of EUAs to be surrendered.
In other words, companies do not "report only 40% or 70% of their emissions" — they surrender allowances for 40%, 70% or 100% of the verified applicable emissions.
1. Determine the EU ETS applicable emissions first, then apply the compliance ratio
EU ETS maritime compliance normally starts by identifying which emissions fall within the EU ETS scope. According to the European Commission, the maritime part of the EU ETS covers 100% of emissions on voyages between EU ports, 100% of emissions at berth in EU ports, and 50% of emissions on voyages between EU and non-EU ports.
A more accurate order of reasoning is therefore:
- Step 1: Confirm whether the vessel falls within the scope of EU ETS applicable ships.
- Step 2: Determine the EU ETS applicable emissions on a voyage- and port-basis in line with the rules.
- Step 3: Complete annual emissions reporting, verification and company-level data consolidation.
- Step 4: Apply the 40%, 70% or 100% compliance ratio for the relevant emissions year to calculate the final EUA quantity to be surrendered.
2. From 40% to 70%: 2025 compliance costs are not a small step up
Emissions from 2024 are subject to the 40% ratio; emissions from 2025 are subject to the 70% ratio.
If a company's EU ETS applicable emissions in 2025 remain broadly the same as in 2024, its EUA requirement will still increase materially — simply because the compliance ratio moves from 40% to 70%.
For example:
If a company's EU ETS applicable emissions in 2024 are 10,000 tonnes of CO₂, then for the 2025 surrender it will need approximately:
10,000 × 40% = 4,000 EUAs
If the same company's EU ETS applicable emissions in 2025 are again 10,000 tonnes of CO₂, then for the 2026 surrender it will need approximately:
10,000 × 70% = 7,000 EUAs
With emissions unchanged, EUA demand rises from 4,000 to 7,000 — an increase of 75%.
This is why companies preparing for 2025 compliance cannot simply extrapolate from the previous year's procurement pace. Even without meaningful changes in fleet size, trade patterns or fuel consumption, the higher compliance ratio alone will drive a higher EUA purchase requirement.
3. From 70% to 100%: 2026 marks the start of full-scale compliance
2026 is not simply about the compliance ratio moving from 70% to 100%. More significantly, the greenhouse gases in scope of the maritime part of the EU ETS also change. The European Commission has explained that CO₂ emissions from large ships have been covered by the EU ETS since 2024, while CH₄ and N₂O will be brought into the EU ETS from 2026.
For vessels burning conventional fuel oil, CO₂ remains the dominant emission item. For vessels using fuels such as LNG, methane emissions and the CO₂e impact of methane slip must also be taken into account when calculating 2026 emissions.
The move from 40% to 70% and then to 100% means that, at unchanged applicable emissions, the number of EUAs a company must prepare will increase year on year. Combined with EUA price volatility, the overall carbon-cost pressure could become significantly more pronounced.
Early quantification, early planning and early engagement will be an important basis for reducing compliance risk and cost volatility. If you have requirements around EUA procurement, allowance-demand quantification or annual compliance planning, we welcome further discussion with Tecway Maritime.
References
- European Commission, Reducing emissions from the shipping sector
- European Commission, FAQ – Maritime transport in EU Emissions Trading System