Maritime decarbonisation: five questions for 2025
Owners and charterers - question three
Fast-paced regulatory, technological and contractual change continues to drive maritime decarbonisation, with numerous fresh challenges emerging day-to-day.
To assist you in navigating these changing times, by focusing on the practical issues likely to impact your business directly, we continue 2025 by illuminating five key maritime decarbonisation question.
This week we ask: should you be checking your charterparty EU ETS provisions now?
Legal context
The EU Emission Trading Scheme (EU ETS) governs maritime emissions produced by vessels on voyages to, from and within the EU from 1 January 2024. Throughout 2024 'shipping companies' were required to monitor their greenhouse gas emissions. In 2025 'shipping companies' are required to report their 2024 emissions (by 31 March 2025) and surrender (by 30 September 2025) a quantity of EU allowances (EUAs) calculated on the basis of the 2024 emissions reported.
EUAs can be acquired at auction on the primary market (the European Energy Exchange), by way of purchase on the secondary market (e.g. ICE) or by way of transfer from third parties – such a contractual counterparties in a charterparty chain.
Why does it matter
Parties with compliance obligations under the EU ETS regime ('shipping companies') will in many instances be relying on the charterparty chain to obtain the EUAs the 'shipping company' is required to surrender by 30 September 2025. The effectiveness of this source of supply depends, however, on i) the terms of the contracts in the chain, and ii) the diligence with which the terms have been administered.
Whilst the BIMCO ETS clause for time charterparties provides for a monthly transfer of allowances from charterers to owners, other provisions work differently. Some may provide for annual transfer of allowances or feature transfer obligations falling very close to the surrender deadline.
Any gaps in supply of EUAs not identified well ahead of the surrender deadline could lead to parties struggling to meet their own EUA obligations, whether those entail surrendering EUAs to the regulator or providing EUAs to another contractual counterparty, or having to purchase EUAs at a market high (EUAs are tradable, transferable and do not have a fixed price) if trying to secure supply close to the compliance deadline. It would therefore be preferable for parties to identify and resolve gaps in supply well ahead of the 30 September surrender deadline.
What should you do
1 – check your charterparties to identify obligations up and down the chain.
2 – check what quantity of allowances are/were due to be transferred in respect of 2024 emissions and the quantity actually available to be transferred or which have been transferred; and
3 – if you have any queries or concerns, or would like to discuss how the position may be improved for the future, consult our maritime decarbonisation experts who can advise and assist you further.
We look forward to supporting you with any queries, providing insight and offering guidance though this time of transition.
