The UK has formally brought maritime transport into its Emissions Trading Scheme (UK ETS), requiring operators of vessels above 5,000 GT engaged in domestic UK voyages and in-port activities to monitor emissions, submit verified reports, and surrender carbon allowances from July 2026 onward. The new framework introduces detailed compliance requirements, emissions monitoring plans, reporting deadlines, and financial incentives for eligible low-carbon fuels, while imposing significant penalties for non-compliance.
London | June 22, 2026 – The UK government has issued comprehensive guidance detailing how maritime operators must comply with the UK Emissions Trading Scheme (UK ETS), marking a significant regulatory shift for domestic shipping emissions and creating new compliance considerations for shipowners, operators, fuel suppliers and bunker industry participants.
The guidance, published by the Environment Agency on 22 June 2026, explains the monitoring, reporting and allowance surrender requirements that apply to maritime operators from the launch of the maritime component of the UK ETS.
Table of Contents
UK ETS Maritime Sector Launches from July 2026
Under the new framework, the first maritime scheme year runs from 1 July 2026 to 31 December 2026, before transitioning to a standard calendar-year cycle from January 2027 onward.
Maritime operators falling within the scope of the scheme will be required to:
- Monitor greenhouse gas emissions from regulated maritime activities.
- Submit verified annual emissions reports.
- Purchase and surrender UK ETS allowances.
- Maintain approved emissions monitoring plans.
- Comply with verification and registry requirements.
Operators must surrender one UK allowance for every tonne of carbon dioxide equivalent (CO₂e) covered by their surrender obligation.
The first surrender deadline covering both the 2026 and 2027 scheme years is set for 30 April 2028.
Which Ships Are Covered?
The UK ETS applies to maritime activities carried out by ships of 5,000 gross tonnes (GT) or above operating within the scheme’s scope.
Covered activities include:
- Voyages between UK ports of call.
- In-port activities at UK ports.
- Movements within ports.
- Time spent at berth and hotelling operations.
Importantly, emissions generated during port stays are included even when a vessel is arriving from or departing to an international destination.
For example, a vessel arriving in Southampton from Singapore would not have its international voyage covered, but emissions generated while unloading cargo, shifting berths and remaining at berth in Southampton would fall within the UK ETS.
Definition of a Maritime Operator
The guidance clarifies that compliance responsibility generally rests with either:
- The registered owner of a vessel; or
- The International Safety Management (ISM) company, provided it has formally assumed operational responsibility and UK ETS compliance obligations through a legally binding agreement.
The Environment Agency stressed that all three conditions must be met before responsibility can be transferred:
- Operational responsibility for the vessel.
- Responsibility for compliance with the ISM Code.
- Responsibility for UK ETS compliance under a legally binding agreement.
If these conditions are not satisfied, the registered owner remains legally responsible.
Domestic Voyages in Scope
A voyage is considered within the scope of UK ETS when a vessel sails between UK ports without an intervening non-UK port of call. The guidance also clarifies that certain stops do not interrupt a voyage.
Stops solely for:
- Refuelling,
- Taking supplies,
- Crew relief,
- Repairs,
- Dry docking,
- Adverse weather shelter,
- Emergency assistance,
are not considered ports of call.
As a result, emissions generated during such stops remain part of the original voyage and must be reported under the scheme.
Offshore Sector Receives Temporary Exemption
One notable feature of the new framework is a temporary exemption for offshore vessels.
Activities undertaken by offshore ships remain outside the scheme until 31 December 2026.
Other excluded categories include:
- Naval and military vessels.
- Search and rescue ships.
- Firefighting vessels.
- Humanitarian assistance operations.
- Fishing vessels.
- Coastguard vessels.
- Government enforcement and surveillance ships.
- Scottish ferry services.
- Vessels below 5,000 GT.
Monitoring Plan Required Within 42 Days
Maritime operators entering the scheme must submit an Emissions Monitoring Plan (EMP) within 42 days of commencing their first UK ETS maritime activity.
The EMP must include:
- Operator information.
- Fleet details.
- Monitoring methodologies.
- Fuel types.
- Emission factors.
- Reporting procedures.
- Delegation arrangements where applicable.
Operators are required to list all vessels for which they hold UK ETS responsibility.
Failure to submit an EMP within the prescribed period could expose operators to enforcement action and penalties.
Four Approved Fuel Monitoring Methods
The UK ETS allows maritime operators to choose from four approved methods for monitoring fuel consumption and calculating greenhouse gas emissions. The selected method must be applied consistently and supported by procedures that verify fuel quantities and identify any discrepancies.
Method A: Bunker Delivery Notes and Tank Stocktakes
Under Method A, operators calculate fuel consumption using bunker delivery notes (BDNs) together with periodic measurements of fuel remaining in onboard tanks. Fuel consumed during a reporting period is determined by adding the fuel onboard at the start of the period to all fuel deliveries received, then subtracting the fuel remaining at the end of the period and any fuel removed from the vessel.
Example: A vessel begins a voyage with 1,000 tonnes of VLSFO onboard, receives 500 tonnes during the reporting period, and finishes with 700 tonnes remaining. If no fuel is de-bunkered, total fuel consumption is calculated as 1,000 + 500 – 700 = 800 tonnes.
Method B: Onboard Fuel Tank Monitoring
Method B relies on regular fuel tank measurements taken onboard using automated monitoring systems, soundings, or dip tapes. Tank readings are typically recorded daily while the vessel is at sea and whenever bunkering or de-bunkering operations take place.
Example: If a ship’s fuel tanks contain 2,500 tonnes of fuel on Monday and 2,350 tonnes on Tuesday, with no bunkering activity between the readings, the operator would record 150 tonnes of fuel consumed during that period.
Method C: Flow Meter Monitoring
Method C uses flow meters installed on engines, boilers and other combustion equipment to directly measure the volume or mass of fuel consumed. Data from all relevant flow meters is combined to determine total fuel usage over a specified period.
Example: Flow meters record that the main engine consumed 120 tonnes of fuel during a voyage, while auxiliary engines and boilers consumed another 30 tonnes. Total fuel consumption for emissions reporting would therefore be 150 tonnes.
Method D: Direct Emissions Measurement
Method D measures greenhouse gas emissions directly from the vessel’s exhaust gas streams rather than calculating emissions from fuel consumption. Sensors continuously monitor greenhouse gas concentrations and exhaust gas flow rates, allowing operators to determine actual emissions released into the atmosphere.
Example: An emissions monitoring system installed in a vessel’s funnel measures carbon dioxide concentrations and exhaust flow throughout a voyage. The system calculates that the vessel emitted 475 tonnes of CO₂ equivalent, which is then used for UK ETS reporting purposes.
Regardless of the method selected, operators are required to maintain robust monitoring procedures and regularly cross-check fuel data, particularly by comparing bunker delivery note quantities with onboard measurements, to ensure emissions reporting remains accurate and verifiable.
Simplified Monitoring Available for High-Frequency Services
The guidance introduces a simplified monitoring option for vessels completing more than 300 voyages annually.
Eligible operators may report annual fuel consumption rather than monitoring emissions voyage by voyage.
To qualify:
- The vessel must be scheduled to perform more than 300 voyages in the scheme year.
- The operator must remain responsible throughout those voyages.
- The vessel must only undertake voyages and in-port activities.
This provision is expected to benefit ferry operators and shortsea services with high-frequency schedules.
Annual Reporting Deadline Set for 31 March
Operators must prepare and submit a verified annual emissions report by 31 March following each scheme year.
Reports must include:
- Fuel consumption by fuel type.
- Emissions from voyages.
- Emissions from in-port activities.
- Emissions reduction claims.
- Applicable surrender deductions.
- Total maritime emissions.
All reports must be independently verified by a UK Accreditation Service (UKAS)-accredited verifier.
Failure to report on time may result in regulator-determined emissions assessments and civil penalties.
Eligible Low-Carbon Fuels Can Reduce Compliance Costs
The guidance provides a mechanism for operators to claim emissions reductions when using certain government-approved eligible fuels. Where eligibility criteria are met, these fuels may be assigned an emissions factor of zero, reducing the operator’s reportable emissions and lowering allowance surrender requirements.
To qualify, operators must provide evidence including:
- Proof of fuel eligibility.
- Purchase documentation.
- Delivery records.
- Fuel quantity data.
- A declaration confirming no double counting of environmental benefits.
The Environment Agency and independent verifiers will review all claims before acceptance.
For bunker suppliers and alternative fuel providers, this provision could become an important driver of demand for qualifying low-carbon marine fuels.
Northern Ireland Routes Receive Special Treatment
The UK ETS introduces a unique arrangement for voyages between Northern Ireland and Great Britain.
Although operators must monitor and report all emissions generated on these routes, only 50% of those emissions will count toward the surrender obligation.
This “surrender deduction” effectively halves the number of allowances that must be surrendered for qualifying voyages.
UK ETS Registry Accounts and Allowance Purchases
Once an emissions monitoring plan is approved, operators will receive a Maritime Operator Holding Account within the UK ETS Registry.
These accounts will be used to:
- Record emissions obligations.
- Hold UK allowances.
- Transfer allowances.
- Surrender allowances for compliance.
Operators are responsible for purchasing sufficient allowances ahead of surrender deadlines.
The Environment Agency warns that acquiring allowances may require significant lead times due to due diligence, contractual arrangements and transaction processing requirements.
Significant Penalties for Non-Compliance
The guidance highlights strict enforcement measures for operators that fail to surrender enough allowances. An operator that misses its surrender obligation faces an Excess Emissions Penalty of:
£100 per missing allowance, adjusted for inflation, in addition to the requirement to surrender the outstanding allowances.
Further penalties may apply if operators fail to comply with subsequent deficit notices issued by regulators.
Key Compliance Dates
2026 Scheme Year
- 1 July 2026: Maritime sector enters UK ETS.
- 31 March 2027: First annual emissions report due.
- 30 April 2028: Allowance surrender deadline for both 2026 and 2027 emissions.
From 2027 Onward
- 31 March: Annual emissions report submission deadline.
- 30 April: Annual allowance surrender deadline.
- 30 June: Improvement report deadline (where required).
- 31 December: Deadline to notify non-significant monitoring plan changes.
Implications for the Bunker Industry
The introduction of maritime emissions trading in the UK creates a direct financial link between fuel consumption and carbon compliance costs.
For bunker suppliers, traders and ship operators, the new regime is expected to increase focus on:
- Fuel consumption monitoring.
- Emissions reporting accuracy.
- Alternative and lower-carbon marine fuels.
- Carbon cost management strategies.
- Verification and digital reporting systems.
As the UK aligns maritime transport more closely with its broader decarbonisation agenda, compliance planning is likely to become an increasingly important element of vessel operations and fuel procurement decisions.
Source: Environment Agency guidance on compliance obligations under the UK Emissions Trading Scheme (UK ETS).