The EU carbon tax on shipping, in plain English
What it is, who pays, how much, and a calculator to estimate what a voyage costs in allowances.
The basics in five points
- Which ships: cargo and passenger ships of 5,000 GT and above, under any flag. Offshore ships of 5,000 GT and above join in 2027.
- Which voyages: anything that starts or ends in an EU / EEA port, plus time spent at berth there.
- Which gases: CO2 since 2024; methane (CH4) and nitrous oxide (N2O) are added from 2026 emissions, which matters most for LNG-fuelled ships.
- Who pays: the shipping company (owner or ISM manager), usually recharged to the charterer.
- How: report emissions by 31 March, surrender allowances by 30 September of the following year.
How much of each voyage counts
| Where the ship is | Share of emissions covered |
|---|---|
| Voyage between two EU / EEA ports | 100% |
| At berth in an EU / EEA port | 100% |
| Voyage between an EU / EEA port and a port outside | 50% |
| Voyage between two ports outside the EU / EEA | 0% |
To stop ships dodging the rule with a quick stop just outside the EU, calls at nearby container transhipment ports (Tanger Med in Morocco and East Port Said in Egypt) do not break the voyage: it is counted from the previous port.
The phase-in: you don't pay for everything straight away
| Emissions of | Allowances to surrender | Deadline |
|---|---|---|
| 2024 | 40% of covered emissions | 30 September 2025 |
| 2025 | 70% of covered emissions | 30 September 2026 |
| 2026 onwards | 100% of covered emissions | 30 September of the following year |
Estimate the cost of a voyage
Estimate
- CO2 emitted
- –
- CO2 covered by the EU ETS
- –
- Allowances to surrender (EUAs)
- –
- Estimated cost
- –
A worked example
A bulk carrier burns 1,000 tonnes of VLSFO sailing from Rotterdam to New York in 2026.
- CO2 emitted: 1,000 × 3.114 = 3,114 tonnes
- The voyage leaves the EU, so 50% counts: 1,557 tonnes
- 2026 emissions are covered at 100%: 1,557 allowances
- At €80 per allowance: €124,560, or about €125 per tonne of fuel
The same voyage between two EU ports would cost twice as much: about €249 per tonne of fuel on top of the bunker price.
What it means for your bunker bill
- At €80 per allowance, carbon adds roughly €125 to €250 to every tonne of fuel burnt on EU trades, so fuel efficiency and route planning pay twice.
- Where you bunker doesn't change the ETS cost: what counts is where the fuel is burnt, not where it is bought.
- Biofuel blends and other low-carbon fuels can reduce the count, if their sustainability is certified under the EU rules.
- FuelEU Maritime is a separate EU rule, in force since 2025, that limits the greenhouse gas intensity of the energy ships use. Both apply at the same time.
Questions people ask
What is the EU ETS for shipping?
The EU Emissions Trading System puts a price on greenhouse gas emissions. Since 1 January 2024 it covers ships: for every tonne of CO2 a ship emits on voyages linked to the EU, its shipping company must hand in one EU allowance (EUA), which it buys on the carbon market.
Which ships are covered?
Cargo and passenger ships of 5,000 gross tonnage and above, whatever their flag. Offshore ships of 5,000 GT and above join from 2027. Offshore and general cargo ships of 400 to 5,000 GT only report their emissions for now.
Who has to pay?
The shipping company: the shipowner, or the company that took over operating the ship (the ISM company). In practice the cost is usually passed on to the charterer through an ETS clause in the charter party.
How much of a voyage counts?
100% of emissions on voyages between two EU / EEA ports and while at berth in an EU / EEA port; 50% of emissions on voyages between an EU / EEA port and a port outside.
What are the deadlines?
Emissions for the year are reported and verified by 31 March of the following year, and the allowances are surrendered by 30 September.
What happens if allowances are not surrendered?
A penalty of €100 per missing tonne, indexed to inflation, and the missing allowances must still be surrendered. A company that fails repeatedly can see its ships refused entry to EU ports.
The small print
- Ice-class ships (IA and IA Super) may surrender 5% fewer allowances until 2030; some island and outermost-region routes and public service routes are temporarily exempt.
- The calculator uses the default CO2 factors of the EU MRV Regulation (tonnes of CO2 per tonne of fuel): heavy fuel oil 3.114, light fuel oil 3.151, gas oil 3.206, LNG 2.750, methanol 1.375. It counts CO2 only: from 2026, methane and nitrous oxide add to the total, especially for LNG engines with methane slip.
- This page is a simplified guide, not legal advice. The figures that count are those in your verified emissions report.
Sources
- European Commission, FAQ: maritime transport in the EU Emissions Trading System
- Directive (EU) 2023/959 amending the EU ETS Directive 2003/87/EC
- Regulation (EU) 2015/757 on monitoring, reporting and verification (MRV) of CO2 emissions from maritime transport, Annex I (emission factors)
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