Emissions Trading System: Are You Ready for the Future of Climate Action?

Posted on Feb 12, 2025 at 09:02 PM

There are many global efforts to reduce and limit carbon and greenhouse gas emissions, thus, the European Union has been implementing the emissions trading system (ETS) within the European lands and waters.

Furthermore, the emissions trading system (ETS) is one of the most effective EU systems or schemes in reducing greenhouse emissions and carbon within the European Union, which by default will reduce the emissions on the global level as well.

In this article, we will introduce you to the whole concept of the emissions trading system (EU ETS) in the maritime industry with guaranteed steps to apply this emissions trading scheme effectively.

What Is an Emissions Trading System (ETS)?

The Emissions Trading System (ETS) is a European cap-and-trade approach that aims to reduce carbon and greenhouse gas emissions from different sectors and industries, including power, aviation, and maritime.

Moreover, the Emissions Trading System (EU ETS) operates by requiring companies to trade specified-value allowances for each ton of CO2 gas they emit within Europe's authority.

However, this cap-and-trade system has the flexibility of allowing companies to trade allowances when they do not require them.

The Emissions Trading System (EU ETS) help the EU achieve its 2030 pollutants mitigation programs most cost-effectively by encouraging major companies and entities to explore and invest in a cleaner energy source and greener technology.

Since When the Emissions Trading System (ETS) Is Applied to the Maritime Industry?

The European Union Emissions Trading System (EU ETS) was first applied in 2005 only to heavy industries, however, since January 2024 the EU Emissions Trading System covered the maritime sector.

Now, shipping companies with large vessels (over 5,000 GT) operating or passing through EU waters must cap-and-trade EU allowances as a transport commission to cover CO2 emissions according to the Emissions Trading System (ETS).



Main Steps to Apply the Emissions Trading System in Your Maritime Business:

These designed steps are shared with you by the best Maritime Training Academy UK to help you learn and understand emissions trading systems (ETS) effectively:

Open a Maritime Operator Holding Account (MOHA):

This could be considered a key step toward compliance with the EU ETS program =, as shipping companies are required to open an official MOHA in the EU Registry.

Furthermore, the ETS MOHA protocol allows maritime companies to buy, hold, and trade EU Allowances based on their ships greenhouse gas emissions.

Buy European Emission Allowances (EUAs):

Typically, all maritime companies that are allowed to work or pass within European Authorities are expected to buy an EU allowance for each ton of CO2 gas emitted by their ship to meet the ETS principle.

However, these allowances could be bought, sold, or traded in the EU carbon market, and their trade price sets the international shipping, transporting, and operating total expenses.

Monitor and Report Greenhouse Gas Emissions:

Based on the European Union Emissions Trading System, ship owners must install approved Monitoring, Reporting, and Verification (MRV) methods for controlling the production quantity of gases.

Then the emission scheme should be published or submitted annually to European regulatory authorities to highlight compliance with EU emissions trading policy in the Union's countries.

Reduce Ship Carbon and Greenhouse Gas Emissions:

Maritime shipping companies working based on the Emissions Trading System (EU ETS) must invest in fuel-efficient technologies, and follow better route planning strategies to lower pollution from GHG emissions.

This mechanism, in one way or another, would lower the ETS cost as eco-friendly technologies mean less launched carbon emission and environmental impacts, and lower ETS Allowances.

Use Green Energy:

Adopting green mechanisms, like shore power, wind-assisted propulsion, and hybrid-electric systems, or even switching to low-carbon fuels are considered a great strategy for reducing emissions and saving costs.

Moreover, following clean energy strategies helps the maritime achieve the required emission reduction based on the Emissions Trading System setting.

Do Accurate ETS Reporting and Documentation:

Maritime companies with large vessels must keep detailed records of compliance actions and emissions data to ensure transparency and prevent penalties.

On the other hand, these audits and records facilitate the trading of unused allowances in the European Union.

Eventually,

The European Union Emissions Trading System aims to enhance the maritime environment and protect species diversity.

Furthermore, attending professional maritime training will not only help you follow the best green strategies and technologies but also understand all rules and obligations attached to the EU ETS.