EU ETS & FuelEU Maritime: the 2026 cost reference for shipping

Built for the people who actually pay these bills: charterers, owners, operators, bunker buyers and the analysts who model TCE. From 1 January 2026 two separate EU carbon rules hit almost every voyage that touches an EU or EEA port — and they work in completely different ways. The numbers, the phase-in, the geographic scope and the penalty formulas are scattered across EU legal texts, class-society advisories and P&I circulars. We assembled the whole picture in one consistent frame, with worked examples and the exact math.

Every figure here is modelled in the rynda voyage-economics calculator, which rolls EU ETS, FuelEU, CII and the ECA bunker premium into one TCE (Time Charter Equivalent — a voyage's net earnings expressed as $/day; see the freight rates reference) — so you can reproduce any number on your own voyage.

📖 See also: ECA / SECA zones — 2026 reference · Laytime & demurrage reference

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Contents

• At a glance
• Two rules, not one
• Who is in scope
• The geographic scope rule
• EU ETS in detail
• FuelEU Maritime in detail
• Who pays — owner vs charterer
• The four-layer compliance stack
• A full worked voyage
• UK ETS and what comes next
• For developers and modellers
• FAQ
• References

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At a glance

The short version, if you read nothing else:

• Two EU rules run in parallel on every voyage touching an EU/EEA port: EU ETS (a carbon market — you buy allowances for CO₂ you emit) and FuelEU Maritime (a fuel quality ceiling — you pay a penalty if your energy is too carbon-intensive).
• 2026 is the year both bite in full. EU ETS reaches 100 % coverage (up from 40 % in 2024 and 70 % in 2025) and expands from CO₂ to CO₂ + CH₄ + N₂O. FuelEU's first full compliance year (2025) settles, with penalties invoiced by mid-2026.
• Geographic scope is identical for both: 100 % of emissions on intra-EU voyages and at berth in EU/EEA ports, 50 % on voyages into or out of the EU, 0 % everywhere else.
• EU ETS is roughly linear in fuel burned. At an EUA price near €75/t, expect on the order of €230–250 per tonne of fuel on the covered portion of a voyage — a large bulker trading into Europe can add €1–1.5 m/year.
• FuelEU is a threshold, not a per-tonne charge. Burn conventional fuel oil and you sit ~7–8 % over the 2025 limit → a penalty. Burn some LNG, bio-blend or use shore power and the penalty shrinks or disappears.
• The two do not cancel out. ETS prices the carbon you emit; FuelEU prices the intensity of your energy. A scrubber (exhaust-gas cleaning system) saves you nothing on either — both are carbon rules, not sulphur rules.

This is a cost-and-compliance reference, not legal advice. The controlling texts are EU Directive 2003/87/EC (ETS) and Regulation (EU) 2023/1805 (FuelEU); always confirm against your verifier and your DoC (the ISM Document of Compliance — the company's safety-management certificate that also fixes who holds the ETS/FuelEU obligation).

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Two rules, not one

The single most common mistake is treating "EU carbon rules" as one thing. They are two instruments with opposite mechanics:

Read that table twice. ETS rewards efficiency; FuelEU rewards fuel switching. A voyage can be excellent on one and poor on the other. Slow-steaming a fuel-oil ship cuts the ETS bill but does nothing for FuelEU intensity. Blending 10 % bio-methanol barely moves the ETS bill but can wipe out the FuelEU penalty.

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Who is in scope

• EU ETS: commercial ships of 5 000 GT and above (GT = gross tonnage, a volume measure of the ship — not its cargo weight), for CO₂ (from 2024) and CH₄/N₂O (from 2026). From 2027 the net widens to general cargo and offshore ships of 400–5 000 GT (initially MRV-reporting, then surrendering).
• FuelEU Maritime: ships of 5 000 GT and above calling at EU/EEA ports, regardless of flag.

Both apply by voyage and port call, not by flag. A Panama-flagged, Greek-owned, Chinese-chartered bulker loading in Rotterdam is fully in scope. The obligations attach to the "shipping company" (the ISM Document of Compliance holder unless another entity is designated) — which is why the owner–charterer cost split has become a live commercial issue (see Who pays).

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The geographic scope rule

Both rules use the same geographic coverage fractions. Learn this once and it applies to both:

"EU/EEA" = the EU-27 plus Norway and Iceland (the maritime EEA states). So a Rotterdam → Bergen voyage is intra-EU (100 %) because Norway is EEA — a frequent surprise. A Santos → Rotterdam voyage is extra-EU (50 %). A Houston → New Orleans voyage is 0 %.

There are anti-evasion rules for "transhipment ports" within ~300 nm of the EU designed to stop operators making a token call at a nearby non-EU hub to convert a 100 % leg into two 50 % legs.

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EU ETS in detail

What it is

The EU Emissions Trading System is a cap-and-trade market. Every year the shipping company must surrender EU Allowances (EUAs) equal to its verified, in-scope emissions. One EUA = one tonne of CO₂-equivalent. You buy EUAs on the market (or from a broker/exchange); the cost is whatever the EUA spot price is when you buy.

The phase-in

Coverage was deliberately ramped so the market could absorb it:

2026 is a genuine step-change: the covered fraction jumps from 70 % to 100 % and methane and nitrous oxide enter scope. For LNG-fuelled ships that is a double hit — methane slip that was invisible in 2025 becomes a paid-for emission in 2026.

How the cost is built

For each voyage leg and port stay:

CO₂e tonnes        = fuel burned (t) × emission factor (t CO₂e / t fuel)
EUA-bearing tonnes = CO₂e tonnes × geographic coverage (1.0 / 0.5 / 0)
                                  × phase-in (1.0 in 2026)
ETS cost           = EUA-bearing tonnes × EUA spot price (€/t)

Emission factors (tank-to-wake, EU MRV defaults, tonnes CO₂ per tonne of fuel):

(HSFO/VLSFO = heavy / very-low-sulphur fuel oil — residual grades; MGO/LSMGO = marine gas oil, a lighter distillate. Lighter fuel-oil blends (LFO) can attract a slightly higher factor, ~3.151.)

Watch the units here: MGO's factor is higher per tonne (3.206 vs 3.114), but MGO also carries more energy per tonne (~42.7 vs ~40.2 MJ/kg). A voyage burns a roughly fixed amount of energy, so you burn fewer tonnes of MGO — and per unit of energy MGO is actually ~3 % lower in CO₂. Switching to MGO in a SECA is therefore roughly carbon-neutral for the ETS bill, not the penalty the per-tonne number alone suggests. The "MGO is worse on carbon" myth comes from reading the per-tonne factor in isolation.

Worked ETS example

A Supramax burns 1 000 t of VLSFO on a Santos → Rotterdam laden leg (extra-EU, 50 % covered), EUA price €75/t, calendar year 2026 (100 % phase-in):

CO₂e            = 1 000 × 3.114            = 3 114 t
EUA-bearing     = 3 114 × 0.50 × 1.00      = 1 557 t
ETS cost        = 1 557 × €75              = €116 775

Add the ~150 t burned at berth in Rotterdam (100 % covered): 150 × 3.114 × 1.0 × €75 ≈ €35 000. Voyage ETS ≈ €152 000. Over a year of European trading that is where the "€1–1.5 m per ship" headline comes from.

The EUA price is your biggest variable

Everything scales linearly with the EUA spot price, which has traded roughly €60–90/tCO₂e across 2024–2026 and is politically expected to rise. Because it is a market price, model a range, not a point. The voyage-economics calculator takes the EUA price as an explicit input so you can stress it.

Surrender & verification timeline

The cost math is only half the obligation — the compliance cycle matters just as much:

1. Monitor emissions per an approved MRV plan (EU Regulation 2015/757 — Monitoring, Reporting, Verification) across the year.
2. Report & verify — submit an annual emissions report, checked by an accredited verifier and logged in the EU's THETIS-MRV system.
3. Surrender the EUAs for that year's verified in-scope emissions by 30 September of the following year, to your administering authority.

A consequence people miss: in calendar 2026 companies are actually surrendering allowances for 2025 emissions at the 70 % rate; the 100 % surrender for 2026 emissions falls due by 30 September 2027. Non-surrender carries the €100/tCO₂ excess-emissions penalty and the still-owed allowances.

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FuelEU Maritime in detail

What it is

FuelEU does not price your carbon directly. It sets a ceiling on the greenhouse-gas intensity of the energy your ship uses — measured well-to-wake (including how the fuel was produced) in grams of CO₂-equivalent per megajoule (gCO₂eq/MJ). If your yearly average is under the ceiling you owe nothing. If you are over, you pay a penalty proportional to the deficit.

The intensity ceiling tightens over time

The baseline is the 2020 fleet average of 91.16 gCO₂eq/MJ. The ceiling steps down:

The early steps look gentle, but conventional fuel oil already sits around 91–92 gCO₂eq/MJ well-to-wake — so a ship burning only VLSFO/MGO is over the 2025 ceiling from day one. The −2 % is enough to guarantee almost the entire fossil fleet a deficit unless it blends in something cleaner.

The penalty formula

Per Annex IV of the Regulation:

penalty (€) =  compliance_deficit (gCO₂eq)
               ────────────────────────────────  ×  2 400
               GHGIE_actual × 41 000

where 41 000 MJ/t is the reference energy of one tonne of VLSFO-equivalent, GHGIE_actual is the ship's own attained well-to-wake intensity (not the target), and €2 400 is the statutory fine per tonne of VLSFO-equivalent energy. In plain terms: the penalty converts your intensity shortfall into "tonnes of VLSFO-equivalent you were effectively too dirty by" and fines each at €2 400. (Watch the divisor — it is your actual intensity, so the penalty bites harder the further above the ceiling you sit.)

A repeat offender surcharge applies: the €2 400 rate rises by a factor for each consecutive year in deficit.

Flexibility: pooling, banking, borrowing

FuelEU is far more flexible than ETS on how you comply:

• Pooling — several ships combine their balances so a clean ship's surplus offsets a dirty ship's deficit across a fleet. Settlement then depends on whoever runs the pool.
• Banking — a compliance surplus can be carried forward to future years.
• Borrowing — a ship may borrow up to ~2 % of next year's allowance to cover a deficit, but repays with a 10 % surcharge, and cannot borrow two years running.
• RFNBO reward — renewable fuels of non-biological origin (e-fuels: green hydrogen-derived methanol/ammonia) count double on an energy basis through 2033, to bootstrap demand. A 2 % RFNBO sub-target can then bite from 2034 if fleet-wide RFNBO uptake stays under 1 %.
• Wind-assist reward — ships with wind-assisted propulsion (rotor sails, kites) get a reward factor that lowers their attained intensity.
• Shore power (OPS) — from 2030, containerships and passenger ships at major EU berths must connect to onshore power or use a zero-emission technology; energy drawn from shore is zero-intensity.

Worked FuelEU example

The same Supramax uses 1 000 t VLSFO on its EU-scope energy (well-to-wake ~91.6 gCO₂eq/MJ) in 2025 (ceiling 89.34):

Energy in scope     = 1 000 t × 41 000 MJ/t          = 41.0 million MJ
Deficit intensity   = 91.6 − 89.34                    = 2.26 gCO₂eq/MJ
Deficit             = 2.26 × 41.0 m                    = 92.7 million gCO₂eq
Penalty             = 92.7 m / (91.6 × 41 000) × 2 400
                    ≈ €59 200

Now blend 6 % bio-methanol (well-to-wake ~30 gCO₂eq/MJ) into that energy: the blended intensity drops below 89.34 and the penalty goes to zero — while the ETS bill barely changes. That is the FuelEU lever in one example: it is a fuel-mix game, not a fuel-quantity game.

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Who pays — owner vs charterer

Both rules place the legal obligation on the shipping company (the DoC holder). But the party that actually controls emissions — by choosing the speed, route, cargo and, critically, buying the bunkers — is often the charterer. That mismatch is resolved contractually:

• Voyage charter: the owner performs the voyage and typically prices ETS/FuelEU into freight, or adds an explicit surcharge.
• Time charter: the charterer orders the ship and pays for bunkers, so the BIMCO ETS Transfer Clause and BIMCO FuelEU Maritime Clause shift the cost (EUA transfer or reimbursement) to the charterer, with reconciliation.
• Pooling / surplus under FuelEU: who keeps a surplus, and who bears a deficit, must be spelled out — otherwise a charterer's clean fuel choice benefits the owner's pool for free.

The practical takeaway for fixtures: the charter party must name the payer, the reference price/mechanism, and the reconciliation timing for both ETS and FuelEU. The rynda voyage-economics calculator exposes a payer / owner-share input precisely so both sides can model their net position before fixing.

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The four-layer compliance stack

For any voyage into Europe, four separate regimes can apply at once. They are independent and additive — do not confuse them:

CII is the one worldwide (IMO, not EU) layer here: an annual A–E rating of how much CO₂ a ship emits per tonne-mile of transport work. There's no cash penalty, but a poor rating (D for three consecutive years, or a single E) obliges a corrective action plan and dents a ship's charter appeal.

A single Rotterdam call can put a ship in all four at once, and they pull in different directions — but mind the units. Burning MGO in the SECA helps sulphur compliance; on carbon it's roughly neutral (its CO₂ is higher per tonne but lower per MJ, and it does little for FuelEU intensity either way). The real conflicts are elsewhere — e.g. slow-steaming to help CII lengthens the voyage. This is exactly why a combined TCE model matters — optimising one layer can quietly worsen another.

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A full worked voyage

Supramax, Santos (BR) → Rotterdam (NL), laden. ~5 400 nm, ~1 150 t VLSFO at sea + 150 t at berth. EUA €75, year 2026, FuelEU 2025 ceiling for the intensity leg. Extra-EU voyage (50 % at sea, 100 % at berth).

On a single deep-sea voyage the EU carbon layers add roughly 25–30 % on top of the bunker bill. Ignore them in your freight or hire calculation and the fixture is underwater before the ship sails. This is the number the calculator produces end-to-end.

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UK ETS and what comes next

• UK ETS extends to domestic maritime (UK↔UK voyages and at-berth) from 2026, on ships ≥5 000 GT — a parallel, separate allowance market. Model it independently of EU ETS; a Rotterdam → Immingham voyage sits under EU rules, a Southampton → Liverpool voyage under UK rules.
• Methane and N₂O entering EU ETS in 2026 will re-price LNG dual-fuel economics — the "LNG is clean" assumption weakens once slip is paid for.
• IMO's global measure (the Net-Zero Framework / mid-term measures, a global fuel standard plus an emissions levy) is — if adopted at the resumed IMO session in autumn 2026 — targeted to enter force around 2028, and will eventually overlap the EU rules for non-EU legs — the direction of travel is more carbon cost, over more of the voyage, every year. See the IMO Net-Zero Framework reference.

The regime is a moving target. This reference is dated; always reconcile against the current EUA price, the current FuelEU ceiling for the compliance year, and your verifier's methodology.

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For developers and modellers

The rynda voyage-economics engine models all of the above deterministically, and you can drive it from your own tooling.

• Voyage TCE with carbon: the voyage-economics calculator takes route, vessel, bunker split, EUA price and payer, and returns a full breakdown — bunkers, port costs, EU ETS, FuelEU, CII rating and the ECA premium — rolled into TCE. Every figure in this article is reproducible there.
• Route + ECA distance API: POST /api/ports-map/route returns eca_distance_nm and the eca_zones crossed for a port list — the geometric input the ETS/FuelEU/ECA math builds on:

curl -X POST https://rynda.io/api/ports-map/route \
  -H 'Content-Type: application/json' \
  -d '{"ports":["BRSSZ","NLRTM"]}'
# → { eca_distance_nm: 214, eca_zones: ["north-sea"], legs: [...] }

• Determining EU scope in code: classify each leg's two ports by country against the EU-27 + Norway/Iceland/Liechtenstein set; apply 1.0 if both are EU/EEA, 0.5 if exactly one is, 0 otherwise. At-berth energy in an EU/EEA port is always 100 %.

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FAQ and common confusions

Q: Does a scrubber help with EU ETS or FuelEU?
A: No. A scrubber cleans sulphur, not carbon. Under ETS you still surrender allowances for the CO₂ from the HSFO you burn; under FuelEU that HSFO's well-to-wake intensity is as high as ever. Scrubbers are an ECA/SECA tool only.

Q: We slow-steamed to cut costs. Which bills drop?
A: Bunkers and EU ETS drop (less fuel → less CO₂ → fewer EUAs). FuelEU intensity is per MJ — it barely moves, because you burned the same kind of fuel. CII improves (less CO₂ per dwt-mile). So speed is an ETS/CII lever, not a FuelEU lever.

Q: Norway isn't in the EU — is a Rotterdam → Bergen voyage really 100 %?
A: Yes. Norway, Iceland and Liechtenstein are in the EEA, which FuelEU and EU ETS treat as EU. Both ports are EEA, so it's an intra-EU voyage at 100 % coverage.

Q: Switching to MGO in the SECA — does it change my ETS bill?
A: Barely. MGO's CO₂ factor is higher per tonne (3.206 vs 3.114), but MGO carries more energy per tonne, so you burn fewer tonnes for the same voyage — and per unit of energy MGO is ~3 % lower. Net, the ETS bill is roughly unchanged (marginally lower). The common belief that MGO "raises your carbon bill" comes from reading the per-tonne factor without adjusting for energy content.

Q: Is FuelEU a per-tonne charge like ETS?
A: No. FuelEU only charges the deficit — the amount by which your yearly average intensity exceeds the ceiling. Get under the ceiling (via bio-blend, LNG, RFNBO or shore power) and you pay nothing, no matter how much fuel you burned.

Q: Who legally owes the money — owner or charterer?
A: Legally, the shipping company (DoC holder). Commercially, the BIMCO ETS and FuelEU clauses push the cost to whoever controls the voyage and buys the bunkers — usually the charterer under a time charter. Always name the payer in the CP.

Q: What happens if we just don't surrender EUAs?
A: Non-surrender carries a €100/tCO₂ excess-emissions penalty and the obligation to still surrender the missing allowances, plus the risk of a ship being refused entry / detained after repeated failures. It is not a route to save money.

Q: Does the 2026 methane inclusion matter for my fuel-oil ship?
A: Minimally — fuel oil has negligible methane slip. It matters most for LNG dual-fuel ships, whose engine methane slip becomes a paid ETS emission from 2026, eroding LNG's cost advantage.

Q: Do these replace the IMO global measures?
A: No — they run alongside. The IMO's global fuel-intensity standard and levy are expected around 2028 (if adopted at the resumed IMO session in autumn 2026) and will cover parts of the voyage the EU rules don't. Expect overlap and eventual reconciliation, not replacement.

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References

Controlling legislation

• Directive 2003/87/EC (EU ETS), as amended by Directive (EU) 2023/959 to include maritime transport.
• Regulation (EU) 2023/1805 — FuelEU Maritime.
• Regulation (EU) 2015/757 — EU MRV (monitoring, reporting, verification), the data backbone for both.

Official guidance

• European Commission — Reducing emissions from the shipping sector
• EMSA — THETIS-MRV and FuelEU guidance portals.

Industry / class

• DNV — EU ETS and FuelEU Maritime insight hubs.
• Lloyd's Register, Bureau Veritas, ClassNK — compliance advisories.
• BIMCO — ETS Transfer Clause and FuelEU Maritime Clause (contract wording).

Model it

• rynda voyage-economics calculator — ETS, FuelEU, CII and ECA premium in one TCE.

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Document version

• 2026-07 — first public version. Covers the 2026 EU ETS full phase-in (100 % + CH₄/N₂O) and the FuelEU 2025 compliance year settling in 2026. Updated as EUA prices, FuelEU ceilings and the IMO global measure evolve.