Operational Guide · Registers & Logbooks

# EU ETS and FuelEU Maritime

Two distinct but linked European mechanisms: one puts a price on CO2 emitted in EU ports, the other requires a progressive reduction in the carbon intensity of the energy mix used on board.

EU ETS FuelEU Maritime European Union decarbonization

## Operational Explanation

The EU Emissions Trading System (EU ETS), extended to maritime transport from January 2024, covers CO2 emissions (and, from 2026, also CH4 and N2O) of ships of 5,000 gross tonnage and upwards calling at EU ports, regardless of flag. The system provides for a gradual phase-in: 40% of emissions reported in 2025 (relating to 2024), 70% in 2026 (relating to 2025), 100% from 2027 onward.

FuelEU Maritime (EU Regulation 2023/1805), in force since 1 January 2025, is a distinct mechanism based on the greenhouse gas intensity of the energy used on board (not on absolute emissions): it requires a 2% reduction relative to the 2020 baseline (91.16 gCO2e/MJ) for the 2025-2029 period, with five-yearly increases up to an 80% reduction by 2050.

## Regulatory Reference

EU ETS Directive (amended to include maritime transport from 2024) and Regulation (EU) 2023/1805 (FuelEU Maritime), in force since 1 January 2025: two distinct mechanisms, both applicable to ships ≥5,000 GT operating to/from/between EU ports.

## Scope of Application

Ships of 5,000 gross tonnage and upwards calling at European Union ports, regardless of the ship's flag.

## Procedure / How to Complete It

1. Monitor and report CO2 emissions (and, from 2026, CH4/N2O) generated to/from EU ports per EU ETS requirements.
2. Purchase and surrender emission allowances (EU Allowances) according to the phase-in percentage applicable to the reference year (40% in 2025, 70% in 2026, 100% from 2027).
3. Calculate the greenhouse gas intensity of the energy used on board per the FuelEU Maritime methodology, verifying compliance with the reduction threshold required for the current five-year period.
4. Assess FuelEU compliance strategies (use of lower-intensity fuels, pooling with other fleet ships, or penalties for non-compliance).
5. Coordinate with charterers the contractual allocation of EU ETS and FuelEU Maritime compliance costs, often the subject of specific charter party clauses.

## Practical Example

Management example: a ship regularly operating routes with EU port calls, with monthly monitoring of EU ETS emissions for annual reporting, and quarterly verification of the GHG intensity of the fuel mix used against the FuelEU Maritime 2025-2029 threshold (89.34 gCO2e/MJ).

## Real Cases

The first EU ETS allowance surrender deadline, relating to emissions reported for 2024, fell in September 2025: many Companies had to deal for the first time with the practical management of purchasing and surrendering allowances, an administrative process distinct from and more complex than the simple technical reporting required by CII and EEXI.

## Common Mistakes Mistake Library

Mistake | Consequence | How to avoid it
--- | --- | ---
EU ETS and FuelEU Maritime treated as a single obligation, without distinguishing their logic | Confusion in managing the obligations, which are actually distinct mechanisms with their own deadlines and logic | Manage the two mechanisms separately, while coordinating the overall compliance strategy
No clear contractual clause with charterers on EU ETS/FuelEU cost allocation | Commercial disputes over the economic responsibility for compliance costs | Always define clear contractual clauses on the allocation of these costs in charter parties
Emissions monitoring limited to annual reporting alone, without periodic checks | Surprises about the extent of compliance costs only at the deadline | Periodically monitor (monthly/quarterly) both EU ETS emissions and FuelEU GHG intensity

## PSC Observations

EU ETS and FuelEU Maritime are not typically subject to direct PSC verification (they are administrative/economic mechanisms managed through competent EU Authorities), but their effective management still requires accurate onboard data, partly overlapping with that required for IMO DCS.

## Operational Tips

- Manage EU ETS and FuelEU Maritime as distinct mechanisms, each with its own logic and deadline, while coordinating the strategy.
- Always define clear contractual clauses with charterers on compliance cost allocation.
- Monitor periodically, not just annually, both EU ETS emissions and FuelEU Maritime GHG intensity.

## Checklist

- CO2 emissions (and CH4/N2O from 2026) monitored for EU ports
- EU ETS allowances purchased and surrendered per the applicable phase-in
- Fuel GHG intensity calculated per the FuelEU Maritime methodology
- FuelEU compliance strategy assessed (fuels, pooling, penalties)
- Cost allocation with charterers contractually defined

## FAQ

What is the EU ETS phase-in percentage for 2026?
70% of emissions reported in 2025, up from 40% in 2025 (relating to 2024), reaching 100% from 2027 onward.
Are FuelEU Maritime and EU ETS the same mechanism?
No: they are distinct mechanisms. The EU ETS puts a price on absolute CO2 emissions (and other gases from 2026) via an allowance trading system; FuelEU Maritime instead requires a progressive reduction in the greenhouse gas intensity of the energy used on board, regardless of the absolute volume of emissions.
What is the FuelEU Maritime reduction target for the 2025-2029 period?
A 2% reduction relative to the 2020 baseline (91.16 gCO2e/MJ), corresponding to a threshold value of 89.34 gCO2e/MJ for the period, with subsequent five-yearly increases up to an 80% reduction expected by 2050.
🎬 Additional photos, videos and interactive diagrams for this topic will be available in a future version of the platform.

## Related Topics

Environmental Vetting and GHG Rating IMO Net-Zero Framework

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