EU ETS

Are you ready for EU ETS in 2024? Our experts at World Kinect can help you navigate the EU ETS requirements.

Navigating EU ETS

The ETS market is complex and will see an overall expansion with a stricter and more complex regulation. With World Kinect, you gain an expert partner, specializing in end-to-end ETS solutions, and a single trusted point of contact throughout the process saving you time, resources and budget by understanding the best method of securing Allowances. You are guided through the practical concerns regarding ETS registry issues. Our experts hold workshops and consult with you on investment decisions and long-term carbon market forecasting.

Read a Report

Read the July 2022 report on EU Parliament adopting ETS reform position.

Read the Newsletter

Watch the Webinar

This 30 minute webinar covers EU ETS key takeaways concerning fundamental price drivers, timelines, regulatory updates and price forecasts.

Watch the Webinar

How can we help you?

Contact our EU-ETS experts.

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What is the EU ETS?

The EU ETS (European Union Emissions Trading System) was established in 2005 and remains to be the largest greenhouse gas emissions trading system across multiple countries and multiple sectors, including shipping (from 2023).

As of March 2023, the current market size of the EU ETS is around €70 billion. This makes it one of the largest carbon markets in the world. The EU ETS is expected to continue to grow as the EU implements more ambitious climate policies and works towards its target of net-zero greenhouse gas emissions by 2050.

It is a cap-and-trade system designed to reduce greenhouse gas (GHG) emissions through the availability of a maximum number of trading units, known as European Union Allowances (EUAs).

What are EUAs?

EUAs are a form of carbon allowance used as the main currency in the EU ETS. A cap on available EUAs is set for each trading period, with the current period running from 2021-2030.1

EUA represents 1 tonne of CO2
1 ton of fuel = 3 EUAs

EUAs are allocated to participants via free allowances which are capped based on a combination of factors including EU-wide climate objectives, member state emission reduction targets, and economic and technological considerations.

Once the cap is set, it is divided into allowances that are individual companies covered by the EU ETS much purchase. At the end of each compliance cycle, all EU ETS participants must surrender enough EUAs to cover all their emissions within that period. If a participant goes above their EUAs cap in a set trading period, then additional allowances must be purchased. Failure to surrender emission allowances will lead to the company receiving a fine of €100/ton for each allowance that was not surrendered. In addition, the company would need to buy the allowance back in the market. Further to this, it may also lead to refusal of port calls.

EU ETS Fact Box

Unit: European Union Allowance (EUA) – one EUA is equivalent of one tonne of CO2
EUA price: Variable; during 2022, its minimum price was €58.30/tonne CO2 on 7th of March and peaked at €98.01/tonne on 19th of August. So far 2023, the EUA has traded above €100/ton three times.
2023 Compliance deadline: 30 April the following year
2024 Compliance deadline: 30 September the following year
Eligibility: Carbon allowances purchased today are valid until 2030

When and how will the shipping industry enter into the EU-ETS?

The EU ETS will apply to all cargo vessels and passenger ships over 5,000 gross tons from 2024.
Offshore service vessels of 5,000 gross tons or more will be included in the MRV Regulation on the monitoring, reporting and verification of CO₂ emissions from maritime transport from 2025 and included in the EU ETS from 2027.
Shipping will need to be compliant for 40% of their emissions from 2024, 70% of their emissions from 2025 and 100% of their emissions from 2026.

From 2026, ship operators are required to surrender units for:
100% of emissions from ships calling at an EU port for voyages within the EU (intra-EU)
50% of the emissions from voyages starting or ending outside of the EU (extra-EU voyages)
Containerized cargo that has been transshipped in ports defined as transshipment ports and no more than 300 n-miles from an EU/EEA will need to include emissions based on its entire voyage
100% of emissions covered from and to third countries from 2026
The measure could eventually apply to all ships above 400gt from 2027
The EU ETS will be extended to cover methane (CH₄) and nitrous oxides (N₂O) from 2026.

What is the relationship between the EU ETS and the purchase of bunker fuel?

How does the EU-ETS differ for ship owning companies versus non-owning ship operating companies?

How can we help you navigate the EU-ETS?

Contact our experts

With specialized teams and a full portfolio of related value-added services, we support every vessel type, every day.

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