Under EU ETS compliance, a shipping company's EUA requirement typically depends on several questions:
- Which vessels fall within the scope of EU ETS?
- Which voyages and port-stay emissions need to be counted?
- How are emissions data converted into the actual compliance volume?
- What percentage of EUAs needs to be surrendered in the relevant year?
Only once the coverage scope and calculation logic are clear can a company go on to estimate its annual allowance requirement and plan EUA procurement.
1. Which vessels are covered by EU ETS?
Under current rules, the maritime element of EU ETS mainly applies to cargo and passenger ships of 5,000 gross tonnage and above that call at EU/EEA ports and are engaged in commercial transport, regardless of flag.
In other words, whether a vessel is brought into EU ETS depends not on which flag it flies, but on ship type, gross tonnage, the nature of its operations, and whether it calls at EU/EEA ports.
The following vessel types are generally not within the scope of the maritime element of EU ETS:
- Warships;
- Naval auxiliary vessels;
- Fishing vessels or fish-processing vessels;
- Vessels not propelled by mechanical means;
- Government vessels used for non-commercial purposes.
Note that EU ETS and EU MRV do not have identical coverage. From 2025, some vessels of 400 GT and above (but under 5,000 GT) are brought into MRV reporting, but this does not mean they are all covered by EU ETS compliance. Whether a specific vessel must surrender EUAs is determined by the EU ETS rules in force for the relevant year.
In addition, under current arrangements, offshore vessels of 5,000 GT and above will be brought into the scope of EU ETS from 2027. Affected fleets should therefore monitor the upcoming compliance requirements.
2. Which shipping emissions need to be counted?
The maritime element of EU ETS uses a calculation logic anchored on EU/EEA ports.
Three main categories of emissions are typically included:
First — voyages between EU/EEA ports.
These voyages are normally included at 100% of emissions. Examples: Rotterdam–Hamburg, Antwerp–Marseille, Genoa–Barcelona.
Second — voyages between an EU/EEA port and a non-EU/EEA port.
These inbound and outbound voyages are normally included at 50% of emissions. Examples: Shanghai–Rotterdam, Singapore–Antwerp, Hamburg–Qingdao.
Third — emissions during port stays in EU/EEA ports.
Emissions produced while a vessel is berthed at an EU/EEA port are normally included at 100%.
3. How are emissions data converted into the compliance volume?
From a practical standpoint, shipping emissions calculations under EU ETS can be broken down into two steps:
- Step 1: calculate the greenhouse gas emissions produced on each voyage leg or during each port stay. This data normally comes from MRV monitoring, reporting and verification (MRV) and serves as the basis for EUA demand modelling.
- Step 2: combine the EU ETS coverage ratio and the annual compliance ratio to calculate the final volume of emissions that must be covered by surrendered EUAs.
A simplified formula:
EUAs to surrender = Σ [ leg or port-stay emissions × applicable voyage ratio × annual compliance ratio ]
Where:
- Leg or port-stay emissions come from MRV monitoring, reporting and verification data;
- Applicable voyage ratio is normally 100% for intra-EU/EEA voyages, 50% for inbound/outbound EU/EEA voyages, and 100% for stays at EU/EEA ports;
- Annual compliance ratio follows the phased compliance arrangement: in 2025 — 40% of 2024 emissions; in 2026 — 70% of 2025 emissions; from 2027 onwards — 100% of 2026 emissions and beyond.
The maritime element of EU ETS initially covered CO₂ emissions only. Under the current arrangement, from 2026 the scope of greenhouse gases for shipping under EU ETS expands to cover carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O).
Because different greenhouse gases have different climate impacts, CH₄ and N₂O must be converted to carbon dioxide equivalent (CO₂e) using the relevant Global Warming Potential (GWP) coefficients before being included in EUA demand calculations.
Simplified:
Greenhouse gas emissions (CO₂e) = CO₂ emissions + CH₄ emissions × GWP coefficient + N₂O emissions × GWP coefficient
From 2026 emissions onward, vessels using LNG, alternative fuels or multi-fuel combinations will therefore need to pay closer attention to emissions data by gas and by fuel when modelling EU ETS compliance requirements.
4. Besides shipping, which sectors must surrender EUAs?
EUAs are not used solely for the shipping sector. EU ETS in its current form also covers energy-intensive industries such as power and heat generation, steel, cement, refining and chemicals, as well as aviation.
From a market perspective, compliance deadlines do not necessarily drive EUA price increases on their own, but they can affect short-term purchasing demand.
Under the current EU ETS compliance cycle, the allowance surrender deadlines for the main compliance entities — stationary installations, aviation and shipping — are all concentrated on or before 30 September. As the deadline approaches, some companies may purchase or top up allowances in concentrated waves, which can influence short-term market demand and sentiment.
For shipping companies, the recommendation is to complete emissions estimation in advance and develop a procurement plan that takes into account the company's EUA shortfall, budget and market conditions, rather than relying entirely on a single, last-minute purchase near the compliance deadline.
Conclusion
Overall, calculating shipping emissions under EU ETS requires attention to vessel scope, voyage type, port-stay emissions, the greenhouse gas scope, and the annual compliance ratio. An accurate understanding of coverage and calculation logic is the foundation for EUA demand modelling, procurement and annual compliance work.
From 2026 emissions onward, shipping will enter the 100% compliance phase, and CH₄ and N₂O will also be included in the calculation — making EUA demand modelling and cost management even more important.
If you need support with EUA procurement, allowance demand modelling or annual compliance arrangements, you are welcome to contact Tecway for further discussion.
Contact
EUA compliance enquiries | Please contact Tecway
Ms. Madelena Ko — Carbon Consulting Advisor
EEX (European Energy Exchange) Trader
BSI (British Standards Institution) Greenhouse Gas Practitioner
Email: madelena.ko@tecwayintl.com
About Tecway
Founded in Hong Kong in 1993, Tecway International Limited is a leading technical consultancy and high-quality agent in the global maritime industry. Drawing on more than three decades of accumulated expertise, the group operates across five core business areas: marine equipment, petrochemical storage and transportation, diesel and internal combustion engines, maritime technical services, and maritime consultancy services.
Tecway's maritime team focuses on green shipping and maritime consultancy services. Our offerings include UK ETS (UKA), EU ETS (EUA) and FuelEU compliance consulting, shipping green hydrogen project support, smart-ship dry-docking solutions, FGSS services, supply and technical support for the Cylinder Liner Diameter Measurement device (CLDM), and export solutions for Chinese-made marine equipment.