EmissionLink urges fair ETS expansion

The European Commission has proposed extending the EU ETS to offshore activities from 2027 and to certain vessels between 400 and 5,000 gross tonnes from 2029.

While the measures would broaden the scheme’s scope and support Europe’s climate ambitions, EmissionLink says they also risk creating significant commercial, contractual and compliance challenges for the maritime sector.

Philippos Ioulianou, managing director of EmissionLink, said the success of the expanded system would depend on its practical implementation rather than its size.

“Expanding the EU ETS will not automatically make it more effective,” he said. “The system must be coherent, proportionate and capable of delivering practical decarbonisation.

“Shipping should not pay twice for the same tonne of emissions. If the EU ETS operates alongside a future IMO carbon-pricing mechanism, there must be an automatic and transparent way to recognise payments and reconcile liabilities.”

The company believes the inclusion of offshore activities presents particular complexities because operational control, fuel use and emissions responsibilities are often shared between vessel owners, charterers, contractors and project developers. As a result, ETS obligations will increasingly need to be defined in charterparties and project agreements, including responsibility for emissions monitoring, allowance purchasing and carbon-price exposure.

EmissionLink also warned that smaller operators entering the scheme from 2029 could face disproportionate compliance burdens, with many lacking the specialist expertise, reporting systems and carbon-market knowledge available to larger shipping companies.

The company welcomed proposals to better align EU monitoring, reporting and verification requirements with FuelEU Maritime reporting and supported measures to prevent emissions circumvention through transhipment. However, it urged policymakers to reinvest at least half of shipping-generated ETS revenues into maritime decarbonisation.

“Carbon pricing must be matched by practical investment,” said Ioulianou. “A meaningful share of shipping-generated revenues should support sustainable fuels, port infrastructure, vessel retrofits and credible energy-efficiency technologies.

“The credibility of the EU ETS will ultimately depend not on how much money it raises, but on whether it treats shipping fairly and helps the industry reduce emissions.”