The European Commission’s proposal to widen the EU Emissions Trading System (ETS) for maritime transport is drawing scrutiny over whether the expanded scheme will be coherent, proportionate and effective, according to an opinion piece by Philippos Ioulianou, Managing Director of EmissionLink, published by Ship & Bunker.
According to Ioulianou, two issues stand out as the EU moves to broaden ETS coverage: the risk of overlapping carbon-pricing systems as the International Maritime Organization develops its own global mechanism, and a growing gap between the revenues shipping is expected to generate and the share actually reinvested in maritime decarbonisation.
Offshore Vessels and Smaller Ships Brought Into Scope
Sship & Bunker reports that the Commission’s plans include bringing offshore activities into the ETS from 2027, with offshore worksites treated as ports of call. Ioulianou notes that this creates complications, since offshore support vessels often remain on site for extended periods, with fuel use and emissions responsibility split between owners, charterers, contractors and developers. He argues this turns ETS compliance into a contractual and commercial issue that will need to be addressed directly in charterparties and project agreements.
The proposal would also extend ETS obligations to vessels between 400 and 5,000 gross tonnage starting in 2029, according to the article. Ioulianou states that many smaller commercial and offshore operators may struggle to meet requirements designed for larger organisations with dedicated compliance teams and established carbon-market expertise.
Double Payment and Revenue Allocation Concerns
According to the piece, alignment between MRV and FuelEU Maritime reporting, along with changes to transhipment rules aimed at limiting circumvention, are positive elements of the proposal. However, Ioulianou states that the Commission has only acknowledged the risk of double payment as the EU ETS and a potential future IMO carbon-pricing framework could apply to the same emissions, without providing a clear reconciliation mechanism.
Ioulianou also raises concerns over how ETS revenues are distributed, arguing that at least 50% of revenues generated by shipping should be reinvested in maritime decarbonisation at the national level, covering sustainable fuels, port infrastructure, vessel retrofits and energy-efficiency technologies.
Does This Matter to You?
The issues raised in this piece are particularly relevant for shipowners, managers and offshore operators active in the Eastern Mediterranean, including Greece and Cyprus, where regulatory exposure under the ETS is described as increasingly demanding. As carbon-pricing rules extend to offshore support vessels and smaller ships, questions around cost allocation, contractual responsibility and compliance capacity may become more significant for commercial decision-making, charterparty negotiations and investment planning. The direct financial or operational impact will depend on how the Commission’s final proposals are adopted and implemented.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
