UK ETS Comes to Maritime: What Ship Owners and Operators Need to Know

The UK ETS Expansion to Maritime

The UK Emissions Trading Scheme (UK ETS) — the cap-and-trade system the UK launched in January 2021 after leaving the EU ETS — has reached the maritime sector. Under The Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026, ships of 5,000 GT and above must, from 1 July 2026, surrender one UK Allowance (UKA) for every tonne of CO2 equivalent they emit on UK domestic voyages and during in-port activities at UK ports. Offshore ships follow from 1 January 2027.

What Is In Scope

• 100% of emissions on voyages between UK ports of call, including round trips
• All in-port emissions in UK ports — at berth, hotelling, cargo operations, anchorage and berth-to-berth movements — even when the ship is on an international rotation
• CO2, methane and nitrous oxide from the start, calculated tank-to-wake (CH4 GWP 28, N2O 265 per IPCC AR5)

International voyages to and from the UK are excluded for now, though a proposal to capture around 50% of international voyage emissions from 2028 is under consultation. Voyages between Great Britain and Northern Ireland receive a 50% surrender deduction. Ships under 5,000 GT, fishing vessels, government non-commercial service and Scottish ferry services are excluded.

Deadlines and the Double Surrender

The first scheme year runs from 1 July to 31 December 2026; from 2027 the scheme year follows the calendar year. Operators must apply for an Emissions Monitoring Plan within 42 days of their first UK maritime activity, and submit a verified Annual Emissions Report by 31 March each year through the METS system. Unlike the EU ETS, no Document of Compliance on board is required — compliance runs entirely digitally through METS and the UK ETS Registry.

There is no phased-in surrender obligation as there was in the EU: coverage is 100% from day one. Instead, a one-off "double surrender" concession applies — allowances for both the 2026 and 2027 scheme years fall due together on 30 April 2028. That is a cash-flow concentration, not a holiday: roughly eighteen months of emissions payable in a single month.

How the UK ETS Differs from the EU ETS

• Coverage: UK — 100% of domestic voyages plus all UK in-port emissions; EU — 100% intra-EEA plus 50% of international voyages
• Phase-in: UK — none; EU — 40% (2024), 70% (2025), 100% (2026)
• Gases: UK — CO2, CH4 and N2O from the start; EU — CO2 from 2024, CH4 and N2O added in 2026
• Surrender deadline: UK — 30 April; EU — 30 September. The UK window is five months tighter
• Document of Compliance: UK — not required; EU — required on board

Most operators trading between the UK and the Continent face both schemes on the same rotation: EU ETS on the international leg, UK ETS on UK port time and any domestic leg.

Penalties

Failing to surrender sufficient allowances by the deadline triggers an excess emissions penalty of £100 (inflation-indexed) per allowance — and the surrender obligation still stands in full afterwards. Failure to report means the regulator determines your emissions and may charge you for doing so, with civil penalties priced off the official carbon price (£49.41 for the 2026 reporting year). Non-compliant operators are also named publicly.

What to Do Now

1. 01

   Identify every ship of 5,000 GT and above calling UK ports, and map domestic voyages, GB–NI voyages and in-port time

2. 02

   Set up your METS account and file your Emissions Monitoring Plan — due within 42 days of your first UK maritime activity

3. 03

   Settle responsibility contractually: delegation from registered owner to ISM manager requires a legally binding written agreement and cannot be backdated

4. 04

   Appoint a UKAS-accredited verifier early; the verified report for the 2026 half-year is due 31 March 2027

5. 05

   Budget for the 30 April 2028 double surrender, and consider buying UKAs progressively rather than at the deadline

6. 06

   Update charterparty clauses to allocate UK ETS costs and data duties, mirroring your EU ETS arrangements