Skuld Club informs on developments in EU and UK emissions trading systems, focusing on efforts to coordinate the individual schemes.
The UK ETS Authority released an interim response on 21 July 2025 regarding the expansion of the UK Emissions Trading Scheme (UK ETS) to include maritime emissions, effective 1 July 2026. This initiative is part of the UK Government’s broader Net Zero Strategy. The first scheme year will run from 1 July to 31 December 2026, with subsequent compliance periods following the calendar year. A full response to the consultation and further guidance will be issued in due course.
Emissions scope and coverage
The UK ETS will cover emissions of carbon dioxide, methane, and nitrous oxide, calculated on a carbon dioxide equivalent (CO2e) basis. The scheme applies to ships of 5,000 gross tonnage (GT) and above, with the scope including domestic voyages between UK ports and emissions while at anchor or moored. Emissions from voyages to Crown Dependencies and Overseas Territories are currently excluded but may be reviewed in the future. International voyage emissions will be addressed in future guidance.
Certain government non-commercial maritime activities, such as military operations, coastguard services, and /medical ships, will be fully exempt from reporting or surrender obligations, though these vessels are expected to follow net-zero decarbonisation goals.
Regulatory and compliance framework
The UK ETS will maintain its own regulatory deadlines, independent from the EU ETS, while allowing operators to purchase UK emission allowances (UKAs) throughout the year. Monitoring, reporting, and verification (MRV) will be based on the UK MRV principles but tailored for UK ETS requirements. Each operator will submit a single Emissions Monitoring Plan (EMP) covering all their ships, with data reported in the Annual Emissions Report (AER).
The scheme incentivizes sustainable fuels through zero-rating and will calculate emissions on a Tank-to-Wake basis. Compliance responsibility is primarily assigned to the Registered Owner, unless a legally binding agreement transfers responsibility to an ISM Company. This approach aligns with EU ETS practices and helps reduce administrative burdens for operators participating in both systems.
Implementation of maritime emissions within the UK ETS
The UK Authority will release a full response to the consultation and provide additional guidance on the implementation of maritime emissions within the UK ETS.
The European Commission released a final recommendation on 16 July 2025 for a Council Decision authorising the opening of negotiations between the European Union (EU) and the UK on a common sanitary and phytosanitary area between the EU and the UK in respect of Great Britain and linking the UK and the EU’s greenhouse emissions trading systems.
The intended agreement linking the UK and the EU’s greenhouse gas emissions trading systems should cover the territories defined by the Treaties for the EU, and Great Britain for the UK, with Northern Ireland included, except regarding wholesale electricity markets, which remain governed by the Windsor Framework.
The UK must also match the EU’s territorial scope for maritime transport emissions trading.
Some of the goals of an agreement between the EU and the UK to link their respective emission trading systems are as follows:
