EU ETS and Shipping: The Legal and Economic Challenges of European Maritime Decarbonisation
European shipowners are questioning the balance between the financial obligations imposed by the EU Emissions Trading System and the support mechanisms available for the energy transition. The evolving framework highlights the importance of regulatory certainty and clear contractual allocation of compliance costs.
San Simón & Duch | Maritime Regulation and Environmental Law | November 2026
The Cost of Maritime Decarbonisation
The progressive inclusion of maritime transportation in the European Union Emissions Trading System (EU ETS) represents one of the most significant regulatory developments affecting European shipping.
According to a report by the European Community Shipowners’ Associations (ECSA), reported by ANAVE on 22 October 2026, shipping accounts for approximately 10% of emissions covered by the EU ETS, while its compliance obligations correspond to almost 20% of the volume of allowances auctioned.
The report estimates that shipping companies would need to acquire approximately 90 million emission allowances annually at current emissions levels.
Using a reference price of €100 per allowance, this would represent an estimated annual cost of €9 billion and approximately €117 billion over the 2028-2040 period.
These figures are industry estimates and remain sensitive to changes in emissions, market prices and future regulatory developments.
The Debate Over Funding and Competitiveness
ECSA argues that the proposed European funding arrangements for sustainable maritime fuels and alternative propulsion technologies would be insufficient to meet the sector’s transition requirements.
The proposed Sustainable Maritime Alternative Propulsion (SMAP) mechanism would reserve the equivalent of 110 million emission allowances over the period 2028-2040.
At the reference price used in the report, this would represent approximately €11 billion.
ECSA estimates minimum support requirements of €33 billion, leaving a potential funding gap of €22 billion.
The figures raise an important policy question: how can European maritime decarbonisation objectives be reconciled with the international competitiveness of shipping?
From a legal perspective, it is essential to distinguish existing compliance obligations from proposed support mechanisms that remain subject to the relevant legislative process.
Regulatory Compliance and Legal Responsibilities
The EU ETS establishes monitoring, reporting, verification and allowance-surrender obligations for shipping companies falling within its scope.
Following its phased introduction, the maritime regime covers 100% of verified emissions for 2026, with allowances to be surrendered in accordance with the applicable statutory timetable.
Subject to the relevant rules and exceptions, the system generally covers emissions from voyages between European Economic Area ports, a proportion of emissions from voyages between EEA and non-EEA ports, and qualifying emissions within ports.
Non-compliance may result in administrative and financial consequences.
Effective compliance therefore requires appropriate internal procedures, reliable emissions data and clear allocation of responsibilities.
Who Bears the Cost of EU ETS Compliance?
One of the most significant contractual issues concerns the allocation of emissions-related costs between parties involved in maritime operations.
EU legislation identifies the entity responsible for compliance before the authorities, while also providing for reimbursement mechanisms where another entity contractually assumes responsibility for certain operational decisions affecting emissions.
In relationships involving owners, managers and charterers, the contractual allocation of costs requires particular attention.
Relevant provisions may address the acquisition and transfer of allowances, settlement deadlines, emissions verification, consequences of non-performance and dispute resolution.
Specialist EU ETS clauses can provide useful mechanisms for allocating these responsibilities, provided they are appropriately incorporated into the relevant contractual arrangements.
Maritime decarbonisation is not exclusively a technological challenge. It is also transforming contractual obligations and legal risk management throughout the shipping industry.
Coordinating EU ETS and FuelEU Maritime
EU ETS obligations coexist with the requirements of the FuelEU Maritime Regulation, which seeks to progressively reduce the greenhouse gas intensity of energy used on board ships.
Although both instruments pursue decarbonisation objectives, their compliance mechanisms are distinct.
Their interaction requires coordinated planning of regulatory obligations, fuel strategies, technological investments and contractual arrangements.
Clearly identifying the responsibilities of each participant can improve commercial predictability and reduce the potential for disputes.
Legal Certainty for a Sustainable Transition
The decarbonisation of international shipping requires long-term investment in vessels, fuels, infrastructure and emerging technologies.
Such investment depends, in part, on a predictable regulatory environment and contractual arrangements capable of allocating costs and risks transparently.
For San Simón & Duch, the legal assessment of maritime decarbonisation requires an integrated understanding of regulatory compliance, maritime contracts and the responsibilities of the various industry participants.
A sustainable maritime transition requires not only technological and financial progress, but also legal certainty, contractual clarity and an appropriate balance between regulatory obligations and available support.
This article is provided for general information purposes and does not constitute legal advice.