UK ETS expansion to maritime sector: DNV outlines key mechanisms and implications

Classification society DNV on Friday (5 June) highlighted key information and implications of the UK Emissions Trading Scheme, which will be expanding to maritime activities from 1 July: 

The UK Emissions Trading Scheme (ETS) is rapidly evolving, shaping how industries price and manage greenhouse gas emissions as the UK moves toward net-zero. As the scheme expands and its carbon market strengthens, understanding its key mechanisms and implications is becoming increasingly important for the maritime sector.

UK ETS implementation timeline

The UK ETS expands to maritime activities from 1 July 2026, and the implementation timeline for the UK ETS in shipping introduces several steps that operators need to follow to be compliant. One of the first requirements is the submission of an Emissions Monitoring Plan (EMP) by the ship operator to the regulator (an equivalent to the EU ETS administering authority). An EMP is submitted per company (operator) and includes relevant data such as a list of ships, their particulars, emission sources, etc. The EMP does not undergo assessment by a verifier but instead is subject to approval by the regulator.

Operators must use an independent verifier accredited by UKAS, such as DNV, to verify their Annual Emissions Report (AER), a company-level report. Operators must submit their AER by 31 March each year and must surrender the number of emissions allowances by 30 April. The deadline to surrender allowances for the first scheme year (1 July to 31 December 2026) will be 30 April 2028. A standard reporting year runs from 1 January to 31 December, while in 2026, only half of the year is subject to reporting (from 1 July, 2026). A summary of the timeline is illustrated in the following figure:

Further, Appendix 1 provides an annual wheel illustration of the UK ETS process.

UK ETS scope and compliance cycle

As of 1 July 2026, the UK ETS applies to cargo and passenger vessels of 5,000 GT and above, with the inclusion of offshore ships delayed until 1 January 2027. The scheme covers emissions from domestic voyages between UK ports. A domestic voyage includes voyages from one UK port to another, as well as voyages that start and end at the same UK port. In addition, emissions generated during ports of call are within scope, including time spent at berth, whether moored or anchored, at UK ports and offshore installations.

Ship operators are required to monitor and report emissions occurring in UK ports and on domestic UK voyages. As a result, emissions from ports of call on international routes are also captured under the UK ETS. The greenhouse gases covered are aligned with those under the EU ETS and include emissions from combustion and slippage of carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O), calculated on a tank‑to‑wake basis. Methane and nitrous oxide are reported using IPCC AR5 global warming potential values (CH₄ = 28, N₂O = 265).

Exemptions apply to ships engaged in government non‑commercial maritime activities, fish‑catching and fish‑processing vessels, and ships operating Scottish ferry services. In contrast to the UK MRV framework (revoked as of 2 April 2026), voyages between the UK and ports outside the EEA, including those in UK Overseas Territories and Crown Dependencies, are not included in the UK ETS, as they are not considered domestic voyages. In addition, a 50% deduction applies to the UK ETS surrender obligation for voyages between Northern Ireland and Great Britain. Other exemptions are stated in the regulations.

The following figure illustrates the principles for a voyage between Northern Ireland and Great Britain, where the surrender obligation, is 50%, while port stays in both Northern Ireland and Great Britain are subject to a 100% surrender obligation. For a voyage between France and Great Britain, there is no (0%) surrender obligation for the voyage itself; however, the port stay in Great Britain remains subject to a 100% surrender obligation.

Note: The full version of DNV’s Technical and Regulatory News on UK ETS can be found here. 

Photo credit: DNV and william william on Unsplash
Published: 8 June, 2026