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KPI OceanConnect: EU ETS success depends on preparation and partnership

Jesper Sørensen of KPI OceanConnect explains how even operators that visit the region only occasionally should be well-prepared to deal with EU Emissions Trading System.

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Jesper Sørensen of KPI OceanConnect

Jesper Sørensen, Head of Alternative Fuels and Carbon Markets at KPI OceanConnect, looks at the EU Emissions Trading System and explains how even operators that visit the region only occasionally should be well-prepared to deal with the system:

Ships arriving at ports in the European Union (EU) since the start of the year must pay the EU for a portion of the carbon emitted during their voyage under the EU Emissions Trading System (ETS). The EU ETS, which has regulated emissions from European industries, energy producers and aviation for more than a decade, came into effect for shipping vessels over 5000GT on 1st January this year. Owners and operators should rethink how they approach and manage their fuel strategies, with the introduction of the EU ETS meaning they will now need to consider the cost of their carbon emissions. 

The EU ETS regulation is changing the way shipping handles its emissions. Until now, the International Maritime Organization (IMO) focused on operational and technical aspects of existing and future fleets to reduce carbon emissions. Europe’s emissions trading system instead puts a price on carbon and requires owners or operators of vessels that call in EU ports to pay for their emissions. With greenhouse gas emissions linked directly to costs, owners and operators will want to consider emissions trading as they plan and develop their fuel strategies. 

The process of engaging with EU ETS is complex. All vessels visiting EU ports will be familiar with the monitoring, verification and reporting (MRV) standards related to the EU ETS that have been in place since 2018. These MRV standards underpin the compliance process for the EU ETS, providing the data that determines the number of EU Allowances (EUAs) an operator needs to buy and surrender. Less familiar to ship owners and operators will be the entirely new processes of buying, holding and surrendering EUAs. 

Operators subject to EU ETS must register with the Union Registry, the body responsible for guaranteeing accurate accounting for all allowances issued under EU ETS. The Union Registry offers two types of accounts for holding EUAs. The first of which is the Operator Holding Account (OHA) from which operators surrender EUAs to cover their emissions. EUAs can only be surrendered to administering authorities through an OHA. The other type of account is a Trading Account (TA). Any business can open a TA, and it allows them to buy and receive EUAs, whether their activities are subject to the EU ETS or not. EUAs purchased through a TA must be transferred to an OHA for surrendering. 

Both types of accounts are opened with individual countries through the Union Registry. The process for opening accounts is complex, and the information required varies between countries. Opening an account can take several months, so even for irregular visitors to EU ports, it is worth doing this as soon as possible. 

In an open market for carbon credits, operators will want to pay attention to when they buy EUAs and the prices they pay. As operators become more familiar with EU ETS, some may choose to develop more sophisticated fuel strategies, considering the likely cost of any carbon credits they will need to surrender alongside their fuel cost. However, in the first year of operation for EU ETS, we anticipate companies will prioritise compliance and building capacity and experience with the system. 

In February, shipping companies that operate frequently in the EU will learn which country will host their OHA. Operators will be allocated to the country whose ports they visit most often, so they are likely to have a good idea of which country they will be registering with. However, shipping operators whose vessels visit EU ports less frequently will be required to open their OHA in the country of their first European port call in 2024. Given the complexities of registration, operators need to be well prepared to work with the country authorities where their first vessel makes port. 

KPI OceanConnect sees working with clients to handle the demands of the EU ETS as an extension of our partner role in the bunkering industry. Our team has already supported many customers with their EUA questions and transactions. Operators need to think carefully about how they will manage EU ETS and be aware that there is support for covering the many areas of preparation. 

Legal teams should review contracts to make sure it is clear who will be responsible for different aspects of compliance in the value chain. Agreements between technical managers and owners must clearly assign responsibilities, and clauses in contracts between the owner and the charterer and the charterer and the cargo owner need to be clear. 

Internally, shipping companies need to assign responsibility for managing engagement with EU ETS in ways that work best for them. A strategy for buying EUAs when low-carbon fuel is expensive may work for some companies, but it is important to understand which team is responsible for working this out. Internal clarity at this level can make working with the EU ETS easier for shipping companies. 

Ultimately, no matter how many port calls an operator makes in the EU, it is important to ensure compliance. Regardless of any low-carbon fuel buying strategy adopted to minimise exposure to the EU ETS, operators must purchase enough EUAs to cover vessel emissions during the reporting year. If they miscalculate, they will be fined and must still come up with the right number of EUAs. Serious non-compliance may lead to vessels being banned from calling at EU ports.

KPI OceanConnect recognises that marine energy users need to adapt to this complex system and ensure they tailor their fuel strategies to accommodate the new influence of emissions trading. We have long worked in partnership with our suppliers and clients to share knowledge and experience of the bunkering industry. As the shipping industry moves forward to a future that includes carbon trading under EU ETS, partnership and knowledge sharing across the industry will be important for delivering a successful energy transition. 

 

Photo credit: KPI OceanConnect
Published: 13 February, 2024

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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