The European Emissions Trading System (EU ETS) has entered a pivotal phase for maritime transport, reaching full emissions coverage beginning January 1, 2026. Shipping companies must surrender allowances covering 100% of verified emissions from vessels over 5,000 gross tonnnage calling at EU or EEA ports as opposed to 70% in 2025 and 40% in 2024.
Intra-EEA voyages and port stays incur full emissions liability; voyages from or to non-EEA ports count for 50% - which could impact major trade routes like Asia-North Europe and transatlantic trade routes. Compliance data shows high adherence, with over 99% of 2024 CO2 emissions covered by surrendered allowances by September 30, 2025.
Expansion into Methane and Nitrous Oxide Production Facilities.
Effective January 2026, an important change will include methane (CH4) and nitrous oxide (N2O) emissions into the European Emission Trading System (EU ETS), calculated on a CO2-equivalent basis. This expands its scope beyond CO2, which was responsible for most of 2024s 89.8 million tonnes of verified maritime emissions; additionally this leads to more allowances being granted across electricity, industry, and maritime sectors totalling 1.185.420.090 issued during 2026.
Updated emission factors increase compliance costs further: heavy fuel oil (HSFO) moves from 3.114 tonnes CO2e per tonne burned to 3.163, VLSFO to 3.200 and marine gas oil (MGO) to 3.255; these adjustments, when coupled with full coverage requirements, push very low sulfur fuel oil costs up by 45% from $220 to $319 per tonne on intra-EU voyages.
Carrier Surcharge Increases in All Trades
Ocean carriers are passing on increased costs through higher emissions surcharges. Rates between Asia and North Europe and Mediterranean/North America/US range from $114-168 per forty-foot equivalent unit (FEU), Asia to Mediterranean from $80 - 130/FEU respectively with Mediterranean/North American between $151-236/FEU; North European-US pricing increases often surpass 40-50% due to EUA prices at EUR75-80 levels.
Some operators combine EU ETS with FuelEU Maritime charges, which mandate reductions in marine fuel's greenhouse gas intensity as biofuel prices increase. Industry responses include benchmarking surcharges against actual carbon costs and optimizing routes to minimize EU exposure.
Life Cycle Analysis Highlights Carbon Capture Opportunities
Life cycle analysis conducted on January 6, 2026 demonstrates substantial emissions savings across the onboard carbon capture value chain. It highlights potential for capture technologies to mitigate maritime GHGs and meet EU regulations on decarbonization.
Maersk Promotes Ethanol Fuel as Green Fuel Alternative
On January 11, 2026, AP Moller-Maersk unveiled plans to increase ethanol use as a green fuel and decrease dependence on China-sourced methanol, in order to achieve net zero ambitions amid tightening emissions regulations and unstable supply chains. This move supports their net-zero ambitions.
These developments signal an intensified push on the maritime sector to reduce carbon emissions, with EU ETS revenues funding innovation funds and cap reductions targeting 62% emissions cuts by 2030 compared with 2005 levels. Shipowners also face recalibrated bunker economics with full 2026 emission surrender due by September 2027.