With just 100 days remaining until the 30 September deadline for surrendering carbon allowances under the EU Emissions Trading System (EU ETS), Columbia Group on Monday (23 June) said maritime operators face a huge milestone in the field of maritime compliance. 

Philippos Ioulianou, Managing Director of EmissionLink, part of Columbia Group, warned the consequences of missing this deadline are severe, and unavoidable.

“Fines, reputational risk and even port access restrictions are not distant threats. They could become very real when used as enforcement tools,” said Mr Ioulianou. “And yet, many operators are still not ready.”

The warning comes amid signs the industry was under-prepared for the scope and complexity of the ETS’s first compliance cycle. By the March 31 reporting deadline, fewer than 40% of shipping companies had submitted verified emissions data.

Mr Ioulianou pointed to a fundamental structural difference between the maritime sector and the ETS enforcement requirements.

“Shipping is global and fragmented by nature. The EU ETS is national and linear. That disconnect has made the compliance requirements unnecessarily difficult,” he said.

While EU member states are responsible for company registration, emissions verification, and the practicalities of setting up accounts, the speed and clarity of implementation have varied dramatically across jurisdictions, leaving many companies left in administrative limbo.

The impact is also being felt far beyond regulatory compliance. The scheme is already transforming commercial relationships across the shipping value chain. Contract negotiations between owners, operators, and charterers have become increasingly complex, with critical questions around ETS cost allocation. Who pays for allowances, who manages submissions, and how cross-regional voyages are handled are still lacking consistent answers.

In many cases, ship managers have taken on the responsibility of acquiring allowances on behalf of owners, often absorbing the financial risk in the hope of later reimbursement. This is especially challenging as some charterers delay transferring funds until just weeks before the surrender deadline, leaving owners and managers vulnerable to fluctuating EUA prices or potential non-payment.

The absence of standardised contractual frameworks has already led to delays, disputes, and even commercial standoffs, despite 2024 covering just 40% of applicable emissions. That figure will rise to 70% in 2025 and 100% in 2026.

With the timeline advancing and stakes rising, industry stakeholders face a steep learning curve, and little room for error.

“The learning curve is steep, and time is not on our side,” said Mr Ioulianou. “If delays, confusion and fragmented responsibility persist into future cycles, the financial and operational fallout could be far greater.”

On a more optimistic note, emissions reporting has accelerated recently, and leading operators are investing in digital compliance tools and advisory support.

“Digital platforms like EmissionLink are helping to streamline reporting, verification and allowance management. But systems alone won’t solve the problem,” said Mr Ioulianou. “We need shared responsibility, consistent regulatory guidance, and better contractual alignment.”

With ETS compliance increasingly tied to vessel earnings and reputation, Mr Ioulianou’s message to the maritime sector is clear:

“The real lesson of the EU ETS’s first year is this: the industry is capable, but the system must be credible and agile to fit the industry. The next 100 days will define more than a compliance cycle. They will determine which players see regulatory change as a burden, and which treat it as a strategic opportunity.”

Photo credit: Columbia Group
Published: 24 June, 2025

The EU and the International Maritime Organization’s (IMO) dual efforts to cut shipping emissions could lead to stacked fines and higher fuel costs for ships visiting EU ports, but it could also sharpen incentives to use biodiesel blends.

11 June 2025

The EU’s FuelEU Maritime and emissions trading system (ETS) is already in force within EU territory, while the IMO’s global greenhouse gas (GHG) penalty system takes effect in 2028 and applies to EU waters, among other regions. Without coordination, ships operating in and out of EU waters that exceed both sets of limits could pay under both systems.

FuelEU targets vessel pools, while IMO rules will be applied on an individual vessel basis. Both cover lifecycle GHG emissions, but IMO’s thresholds are stricter (see chart). FuelEU penalties are currently €2,400/t of VLSFO energy equivalent ($2,708/t in May). From 2028, IMO penalties will range from $100/t CO₂ e for breaching the direct GHG limit to $380/t for surpassing the base threshold. On top of this, the EU ETS will require shipowners to pay for 100pc of CO₂ emissions from combustion in EU waters starting in 2026.

In May 2025, Rotterdam high-sulphur fuel oil (HSFO) averaged $415/t and ETS carbon credits averaged $79/t. Since VLSFO emits 3.114t of CO₂ per tonne burned, ETS alone would add $246/t for 100pc CO₂ charge. If a vessel also breaches FuelEU and IMO limits, it would face another $71/t and $82/t, respectively, bringing the total penalty burden to $399/t and the effective HSFO price to $814/t in 2028 (see chart). A comparable ship operating only in Asia would pay $497/t, factoring in IMO penalties alone.

In May,northwest Europe B30 biodiesel — a used cooking oil methyl ester and very low-sulphur fuel oil blend — averaged $790/t. Considering a $173/t CO₂ EU ETS emissions cost that covers 100pc of emissions from combustion, and $25/t IMO overcompliance credit in 2028, the B30 price would be $938/t, a premium to HSFO. But by 2030, the combined effect of IMO and EU penalties plus overcompliance credits would flip B30 to a discount for EU-bound ships. Outside EU waters, IMO alone would not tip the balance.

The overlapping rules are likely to prompt shipowners to concentrate low-carbon fuel use in EU waters, shifting the bulk of global shipping emissions reductions to the North Sea, Baltic Sea, Mediterranean, and northeast Atlantic, leaving the Pacific, Indian, Arctic, and western Atlantic regions with less progress.

“The [European] Commission will assess the new global measure to see how it interacts with current EU maritime-related regulations, maintaining environmental integrity while avoiding significant double burden”, it said in a statement in April. The EU has two and a half years until 2028 to make a decision.

By Stefka Wechsler

FuelEU and IMO well-to-wake GHG Intensity gCO2e/MJ

NW Europe bunkers with IMO and EU penalties $/t

Photo credit and source: Argus Media
Published: 11 June, 2025

ship.energy on Wednesday (21 May) announced that its 2025 summit is set to take place at the Port of Barcelona from 10 to 11 June, uniting key players across the energy, port, and technology sectors to address one of the most critical barriers to maritime decarbonisation: the ‘last mile delivery’ of low-carbon marine fuels.

With European and international regulatory pressure mounting – including the rollout of FuelEU Maritime, the EU Emissions Trading System, and expected new IMO fuel standards – the industry is being pushed harder than ever to cut greenhouse gas emissions or face increasing penalties.

However, regulations alone cannot drive meaningful change. The summit’s central theme, Going the last mile: Uniting energy, port and technology stakeholders to deliver shipping’s energy transition, will explore how different sectors must collaborate to ensure that alternative fuels reach vessels when and where they are needed.

Attendees can expect insight-rich sessions covering:

• The role of ports – from major bunkering hubs to smaller regional ports – in enabling fuel infrastructure and supporting first movers.
• Progress and bottlenecks in fuel supply chains.
• How shipping can strengthen demand signals to energy providers, shipbuilders and financiers.
• The latest technological innovations supporting the last mile – both shipboard and shoreside.

Real-world case studies and a focus on Iberian-led initiatives will anchor discussions in practical examples, underscoring the region’s role in advancing maritime decarbonisation.

Note: More information and registration can be found here.

Photo credit: ship.energy
Published: 22 May, 2025