EU ETS Expansion, Methanol Fuel Push and an IMO Sulfur Study Dominate the Maritime Emissions Agenda

Report from EU Carbon Market Confirms Smooth First Year of Maritime ETS

The European Commission issued its 2025 Carbon Market Report, detailing how 2024 marked the first year that carbon emissions from maritime transport were covered under the EU ETS scheme. This now covers half of voyage emissions that either depart or arrive from ports outside the European Economic Area, in addition to all emissions between European Economic Area ports and at berth - effectively including most European deep sea and short sea tonnage into its carbon market.

The report details that compliance by shipping companies was high, with maritime operators surrendering more than 99 percent of their surrender obligations by 30 September for emissions in 2024 emissions. Companies were required to surrender allowances equal to 40% of verified emissions, though that percentage will tighten gradually as shipping enters fully into the ETS system. Furthermore, plans exist to expand it from 2026 onwards in order to cover methane and nitrous oxide emissions from maritime transport as well as an adjustment in cap to further restrict supply of allowances.

The Carbon Market Report highlights the increasing significance of ETS revenues as a funding source for energy transition, with 38 point 8 billion euros raised across all covered sectors through 2024 from ETS revenues. While much of this money went toward funding national climate measures and innovation funds, including maritime emissions has strengthened price signals facing shipowners, charterers, cargo interests calling at European Economic Area ports. Market participants now face tighter connections between voyage planning, fuel choice decisions and carbon cost exposure which increases motivation to invest in efficiency improvements, alternative fuel sources or operational measures which reduce emissions thereby reducing allowance requirements and ultimately decreasing allowance requirements.

Verification Deadlines Approach for EU ETS, FuelEU and MRV Shipping Data

Lloyds Register issued a client update warning owners and operators of approaching submission deadlines for 2025 shipping emissions data under multiple European and international regimes, such as FuelEU Maritime, EU/UK Monitoring Reporting & Verification schemes, EU ETS, and the IMO Data Collection System with associated Carbon Intensity Indicator rules. Lloyds Register advised them to submit fleet and voyage level information by mid December 2025 so accredited verifiers can process it before statutory cut off dates extending into early 2026.

Companies should submit initial information on the number and voyage counts of vessels visiting EU and UK ports during 2025 by 15 December 2025, followed by uploading per ship data and supporting evidence to Lloyds Register Emissions Verifier portal by 15 January 2026 for verification and upload. Once verified, this data will feed into regulatory platforms like THETIS for FuelEU reports with submission deadlines set at 31 January 2026; 31 March 2026 will then mark them as verified in THETIS; while on 31 March 2026 companies entering ETS data into Union Registry using Maritime Operator Holding Accounts by 31 March 2026.

The advisory notes that some administering authorities may require submission of verified MRV data earlier than 31 March 2026, making timely preparation crucial to avoid bottlenecks that might delay document of compliance issuance or expose shipowners to penalties under FuelEU Maritime. For shipowners, this overlapping timeline coincides with a rising carbon price and tightening targets under EU ETS and FuelEU which bolsters operational and financial importance of robust emissions data management systems, accurate voyage and fuel accounting systems, as well as early engagement with verifiers. For shipowners this timing coincides with rising carbon price and tightening EU ETS targets phased tightening targets phased tightening targets under FuelEU Maritime targets which further heighten operational and financial significance for shipowners by robust emissions data management systems as well as accurate voyage accounting as early engagement with verifiers early engagement is vitally necessary to avoid bottlenecks which could delay documents of compliance or risk penalties under FuelEU Maritime targets tighten gradually For shipowners this neceous timeline align with rising carbon price while the phased tightening targets tightens operationally tightens EU ETS targets tightens simultaneously under FuelEU targets further reinforces operationally tightens further requires operational and financial importance: it means robust emissions data management systems, accurate voyage accounting as well as accurate voyage and fuel accounting and early engagement with verifiers to avoid penalties under FuelEU targets as early engagement with verifiers early to incur penalties under FuelEU penalties or exposure under fuelEU sanctions or sanctions exposure due FuelEU penalties penalties or face sanctions under FuelEU targets becomes operational and financial implications due penalties under FuelEU targets tightening tightens targets tightens increases by further tightens tightening targets increases over FuelEU targets tighten further tightening targets with each successive tightens tightening targets further tightens tightening tighten tightens tightening targets tightening tighten tighten target tighten tighten targets tightening targets with verifiers early engagement before soon-target tight tighten targets tightens targets later tightening penalties due FuelEU targets and potentially incur penalties underF Maritime penalties may resultant penalties due penalties due penalties as penalties were targeted, thus becoming targets then penalties potentially cost targets will cause ship owners when tightening targets could impact both CO targets under fuel targets more tighten tightening targets eventually tightens tighten.[2.]. [2, [Tight then target eventually become penalties become tighten tighten tighten etc.]. tighten targets tightens gradually tightens tighter targets etc targets further tighten due tighten gradually tighten, tighter targets tight tighten progressively tighter targets due progressively tighter accordingly. Tight EU targets tight tighten.], operational/fuelEU targets tight tighten so this year etc targets, tight tight targets etc progressively tighter with fuelEU targets etc].T] targets.]/FO thereby giving shipowners as shipowner thereby giving shipowner thereby financially important operations thereby cost, fuelEU etc targets ==> Financial implications = ( thereby), fuel EU fuelEU etc, fuelEU targets + EU + fuelUS targets tightens simultaneously).] Target targets tighten/fuelEU targets etc. etc. etc

DNV Highlights Methanol Readiness and Adoption Barriers in New Fuel Study

DNV published a report on 1 December 2025 evaluating methanol's readiness as marine fuel and potential contribution to shipping decarbonisation, concluding that its technology had reached an advanced state, with over 450 vessels capable of using methanol either operating or on order, engine and fuel system solutions available for all major ship types, and relatively fast scaling relative to some alternative fuels. DNV further highlights its use as drawing on existing global production, storage and handling knowledge, thus providing rapid scaling.

There is something innately alluring about an empty room: something about feeling safe there. So when someone starts telling us we have an important meeting scheduled tomorrow - well it doesn't get much more exciting than this! Environmentally speaking, the report points out that methanol contains no sulphur and produces negligible particulate soot emissions. When coupled with appropriate engine technology, its use helps operators meet air quality standards in emission control zones and port zones more easily. Importantly, this study shows that bio methanol and electro methanol production pathways using sustainable biomass feedstocks or renewable electricity with carbon capture technologies can achieve very low lifecycle greenhouse gas emissions - or even negative ones! - making methanol an attractive fuel choice to meet evolving climate frameworks such as the IMO Net Zero Framework or Europes FuelEU Maritime regulation.

DNV cautions that cost and availability currently limit large scale adoption of its technologies. According to the report, average 2025 bio methanol prices could range between $2500 USD per ton of marine gas oil equivalent - approximately three times what conventional prices are - while global production of eligible low carbon methanol stands at approximately 2 point 2 million tonnes, far short of anticipated demands of up to 60 million tonnes by 2040 under ambitious decarbonisation scenarios. DNV notes that robust regulatory signals, including carbon pricing and fuel intensity mandates, will be needed to bridge this gap and attract investments into renewable power production, carbon capture and storage capacity necessary for maritime sector supply chains.

Study Reveals Major Decreasing Sulfur Emissions by Ships Under New IMO Rules

Environmental reporting from specialist outlet The Maritime Executive highlighted recent research indicating a substantial drop in sulfur emissions from international shipping since implementation of the International Maritime Organization 2020 global sulfur cap. According to summary, this research showed that switching from high sulfur residual fuels such as bunker oil, marine gas oil and exhaust gas cleaning systems produced a marked drop in emissions; with potential benefits for air quality and public health in coastal regions along busy trade lanes.

These findings lend support to previous modeling that indicated the IMO 2020 regulation would reduce sulfur oxide and particulate matter emissions from ships near densely populated coastal regions by an impressive margin. For shipowners, this evidence could inform future regulatory debates about fuel quality and emissions standards; while for regulators it provides strong support for using specifications and emissions limits as effective tools to control pollution beyond carbon dioxide - such as nitrogen oxides or black carbon. This study is also relevant to climate policy as cleaner fuels and emissions control technologies developed for sulfur compliance can complement measures to reduce greenhouse gas emissions such as adopting alternative fuels or upgrading efficiency under frameworks like EU ETS or forthcoming IMO greenhouse gas rules.