With only 100 days until the September 30 deadline for surrendering carbon allowances under the EU Emissions Trading System (EU ETS), maritime operators are reaching a critical compliance milestone. Philippos Ioulianou, Managing Director of EmissionLink, part of Columbia Group, emphasizes the severe consequences for those who miss the deadline. He warns that fines, reputational damage, and potential port access restrictions could soon become realities for unprepared operators, many of whom are still not ready for compliance.
The warning signals a concerning trend within the industry as it grapples with the complexities of the ETS’s first compliance cycle. By the March 31 reporting deadline, fewer than 40% of shipping companies had managed to submit verified emissions data. Ioulianou highlights a fundamental disparity between the fragmented nature of global shipping and the linear, national approach of the EU ETS, which complicates compliance.
Variations in implementation speed and clarity across EU member states have left many companies stranded in administrative limbo. This regulatory environment is reshaping commercial relationships within the shipping value chain. Contract negotiations involving owners, operators, and charterers are becoming increasingly intricate due to critical questions surrounding the allocation of ETS costs.
The responsibility for acquiring allowances often falls to ship managers, who face the financial risk of fluctuating allowance prices while waiting for reimbursement from charterers. Currently, the lack of standardized contractual frameworks is causing delays and disputes, even as only 40% of applicable emissions are covered in 2024. This percentage will escalate to 70% in 2025 and reach 100% in 2026.
Ioulianou stresses that if confusion and fragmented responsibility continue, the fallout could be significant. Despite these challenges, there is a positive trend in emissions reporting and investment in digital compliance tools. However, Ioulianou underscores that technology alone cannot address the issues.
The industry requires shared responsibility, consistent regulatory guidance, and better contractual alignment. As compliance impacts vessel earnings and reputations, Ioulianou’s message is clear: the next 100 days will define how the maritime sector responds to regulatory changes—whether as a burden or a strategic opportunity.