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EU Emissions Trading System - what, when, who

EU is racing to reach an agreement on the EU ETS directive in time for 2023 – Let’s take a look at what has happened so far.

Quick summary MEPC 78: Impact on commercial decarbonization

The outcome of the latest International Maritime Organisation (IMO) meeting, MEPC 78, shows that progress is being made on GHG matters. EEXI, CII and SEEMP guidelines were finalized, and the Mediterranean Sea will be considered a Sulphur emission control area (SECA). However, no decision regarding zero emissions target in 2050 was taken at this point.

Shipping’s carbon cost could increase fivefold

Deleting shipping’s phase-in period in the EU ETS would lead to a fivefold rise in carbon cost in the initial year. It will be a steep learning curve for commercial decision-makers who are influenced by carbon exposure. The added carbon cost to a commonly traded intra-EU tanker route would go from USD 14 000 to USD 70 000. This is a new type of exposure that the industry needs to get familiar with, says Siglar CEO Sigmund Kyvik.

Emission Schemes

EU Emissions Trading System

The EU Emissions Trading System (EU ETS) is the European Union’s carbon pricing mechanism, and since 2024 it has included maritime transport. It places a cost on greenhouse gas emissions from ships by requiring companies to monitor emissions (under EU MRV) and surrender tradable emission allowances.

UK Emissions Trading System

The UK Emissions Trading Scheme (UK ETS) is the United Kingdom’s carbon pricing mechanism. It operates as a cap-and-trade system that places a cost on greenhouse gas emissions by requiring operators to surrender tradable emission allowances corresponding to their verified emissions.

Gabon Sovereign Carbon Initiative

The Governments of Djibouti and Gabon have introduced sovereign carbon registry frameworks that apply a carbon cost to qualifying ship movements to and from their ports.

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"We want to help sustainable shipowners achieve higher fleet utilization and improved return on their green investments. "

Geir Olafsen, CDO Siglar
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