Regulation · 6 min read

EU ETS and FuelEU for shipping: the 40/70/100% phase-in, the surrender, pooling and passing costs to charterers

70% of 2025 emissions is due by 30 September 2026; 100% from 2026. Who surrenders, what FuelEU pooling does, and how BIMCO clauses pass the cost on.

The Naavra regulatory desk · 2026-09-24 · 1,409 words · 6 min read

Shipping entered the EU Emissions Trading System in 2024 under Directive (EU) 2023/959. The obligation was phased in: allowances for 40% of 2024 emissions were surrendered in 2025, and allowances for 70% of 2025 emissions are due by 30 September 2026. From the 2026 emissions year the phase-in is over. Every tonne in scope needs an allowance, and methane and nitrous oxide count alongside CO2.

At the same time, FuelEU Maritime (Regulation (EU) 2023/1805) has run since 1 January 2025. The first FuelEU compliance cycle closed in mid-2026. The two regimes read the same fuel data but ask different questions: the ETS prices every tonne emitted, while FuelEU sets a limit on the greenhouse gas intensity of the energy used. This article covers both, with the practical question every commercial desk asks: who pays, and how does the cost reach them?

The phase-in, year by year

The system covers ships of 5,000 gross tonnage and above carrying cargo or passengers for commercial purposes. Offshore ships of 5,000 GT and above join from the 2027 emissions year. General cargo ships and offshore ships between 400 and 5,000 GT already report emissions under the EU MRV regulation from 2025; whether they come into the ETS is under review by the European Commission.

An illustration of the step to 100%

Illustration: a synthetic tanker with 16,000 tonnes of CO2 in ETS scope each year, and an assumed allowance price of €75. The price is an assumption, not a forecast.

The same ship, the same trade, and the bill two and a half times the first year's. For an LNG-fuelled ship the 2026 figure rises further, because methane slip now counts.

Which emissions count

• All emissions on voyages between two EU or EEA ports, and at berth in an EU or EEA port.
• Half of the emissions on voyages into or out of the EU.
• A call at a neighbouring container transhipment port outside the EU, within 300 nautical miles of an EU port, does not break the voyage. This stops a short hop outside the EU from halving the bill.
• Some voyages to small islands and outermost regions have temporary derogations. Check the Commission's published list for your trade.

Who surrenders: the registered owner, unless there is a mandate

This is the point most often got wrong. Under the ETS Directive the "shipping company" is, by default, the registered owner. The ISM company, often the ship manager, takes on the ETS and MRV obligations only if the registered owner mandates it and the ISM company files proof of that mandate with the administering authority. Without that document, the registered owner is responsible.

Whoever holds the role surrenders the allowances. Contracts can move the cost; they cannot move the legal obligation.

Passing the cost to charterers: the BIMCO clauses

The commercial principle is simple: whoever decides where the ship goes and how fast should pay for the emissions. BIMCO has turned that into standard wording.

• ETS Allowances Clause for Time Charter Parties 2022. The charterer transfers allowances (or pays) for the emissions during the charter period, based on the ship's monitored figures.
• ETS clauses for voyage charter parties and for SHIPMAN, approved in December 2023, for voyage fixtures and for management agreements.
• FuelEU Maritime Clause for Time Charter Parties 2024, adopted in November 2024, which deals with the compliance balance, the fuel the charterer supplies and how surplus or deficit is settled.

The practical difficulty is timing. Allowances are surrendered once a year, but voyages close every few weeks. A company that waits for the verified annual figure to recharge may be chasing a charterer that redelivered months ago.

1. Agree the method in the clause: allowances transferred, or cash at an agreed price and date.
2. Recharge per voyage on the provisional figure, and true up after verification.
3. Keep a running allowance position per company and per charterer, so recharges and surrender both add up.

The yearly calendar

FuelEU: the limit, the penalty and pooling

FuelEU measures the well-to-wake greenhouse gas intensity of the energy a ship uses, against a reference of 91.16 gCO2e per megajoule. The limit falls by 2% from 2025, 6% from 2030, 14.5% from 2035, 31% from 2040, 62% from 2045 and 80% from 2050. The same voyage scope applies as for the ETS: all energy between EU ports and at berth, half on voyages in or out.

A ship below the limit earns a compliance surplus; one above it runs a deficit. A deficit left uncovered costs €2,400 per tonne of VLSFO-equivalent energy, and the penalty grows by 10% for each consecutive year in deficit. Three tools cover a deficit before it becomes a penalty:

• Banking. A surplus can be carried forward to the next period.
• Borrowing. A limited advance surplus can be borrowed from the next period, and must be repaid with a premium. It cannot be used in two consecutive years.
• Pooling. Ships' balances are pooled so that one ship's surplus covers another's deficit. Pools can include ships from different companies, and the pool must be in overall surplus. Pooling is recorded by 30 April.

Why pooling changes the fleet question

Pooling turns FuelEU from a ship-by-ship problem into a fleet problem, and a market. A single LNG or biofuel ship with a large surplus can cover several conventional ships. The surplus has a price, set by the penalty it avoids. For owners this means the question is not "can each ship comply?" but "what is the lowest-cost way for the fleet to be in balance, and who among our charterers and pool partners is paying for what?" Put that in writing in the same place as the ETS clause.

What a missed obligation costs

What to do Monday

• Confirm the 2025 surrender for each ship is complete before 30 September 2026, and file the evidence.
• Check who is the shipping company for each ship: registered owner, or ISM company with a filed mandate.
• Re-price 2026 voyages at 100% scope, adding methane and nitrous oxide for LNG and dual-fuel ships.
• List every time charter without an ETS clause or FuelEU clause; fix them at the next renewal or fixture.
• Start per-voyage recharging on provisional figures, with a true-up after verification.
• Build each ship's FuelEU balance month by month, and decide by March whether to bank, borrow or pool.
• If offshore ships of 5,000 GT and above are in your fleet, prepare their monitoring now for the 2027 emissions year.

Questions and answers

Topics

This article explains; it is not legal or regulatory advice. Check the instrument in force for your ship.