UK ETS Maritime Expansion: What Shipping Operators Need to Know
From 1 July 2026, qualifying domestic shipping activities will be brought into the UK Emissions Trading Scheme (UK ETS), introducing carbon pricing obligations for a range of maritime operators (UK Government, UK ETS Maritime Regulations 2025).
The expansion represents a significant development for the domestic shipping sector, extending the UK's carbon market to maritime emissions and creating new monitoring, reporting and allowance surrender requirements for operators.
For organisations affected by the changes, understanding the scope, timelines and compliance obligations will be essential as the sector prepares for implementation.
What is Changing?
From 1 July 2026, emissions from qualifying domestic shipping activities will fall within the scope of the UK ETS (UK Government, UK ETS Maritime Regulations 2025).
The scheme applies to vessels of 5,000 gross tonnage (GT) and above and covers emissions generated from:
Domestic UK voyages between UK ports
Emissions at berth while vessels are moored in UK ports
In-port activities, including manoeuvring and movements within ports
The expansion also aligns maritime reporting requirements more closely with other sectors already covered by the UK ETS.
Which Emissions Are Covered?
The maritime expansion covers three greenhouse gases:
Carbon dioxide (CO₂)
Methane (CH₄)
Nitrous oxide (N₂O)
These emissions will be reported on a CO₂-equivalent (CO₂e) basis (UK Government, UK ETS Maritime Regulations 2025).
What is Not Included?
At launch, the scope of the scheme will not include:
International voyages
Crown Dependencies
British Overseas Territories
Most offshore vessels
Most offshore vessels are expected to enter the UK ETS from 1 January 2027 under the next phase of the expansion (UK Government, UK ETS Maritime Regulations 2025).
Key Compliance Dates
The introduction of maritime into the UK ETS will occur through a phased compliance timeline:
1 July 2026: Maritime emissions monitoring begins
31 March 2027: First verified emissions report due
30 April 2028: First allowance surrender deadline
These milestones mark the beginning of the compliance cycle for affected operators and establish the reporting and surrender framework that will apply going forward.
What Will Operators Need to Do?
For shipping companies, shipowners, ISM managers, charterers and commercial operators within scope of the UK ETS maritime framework will need to:
Monitor emissions from covered activities
Obtain third-party verification of emissions data
Purchase UK Allowances (UKAs)
Surrender allowances annually
Account for carbon costs within commercial contracts and operational planning
While many organisations are already familiar with monitoring and reporting requirements, the introduction of a carbon cost creates a new commercial consideration for domestic shipping activities. The scheme is separate from the EU ETS, meaning qualifying shipping activity may require operators to comply with both regimes.
Why It Matters
The inclusion of maritime transport within the UK ETS is another step in the expansion of carbon pricing across the UK economy.
For shipping operators, the change introduces direct exposure to carbon markets and allowance purchasing requirements. As carbon costs become part of operational decision-making, organisations may need to consider how and when they procure UK Allowances to meet future compliance obligations.
The introduction of the scheme also increases the importance of understanding carbon market dynamics and the potential impact of carbon price movements on operating costs.
Planning Ahead
Although the first surrender deadline is not until April 2028, operators may benefit from considering their carbon procurement approach well in advance.
Many shipping activities are planned months ahead through chartering arrangements and voyage schedules. Understanding future allowance requirements and developing a procurement strategy early may help organisations better manage their exposure to the UK carbon market.
If you are a shipping operator beginning to consider your UK ETS procurement strategy, reach out to Grey Epoch. Our team can walk you through the different procurement structures and services available, helping you understand the options for managing future UKA purchasing requirements.
References
UK Government, UK ETS (Maritime) Regulations 2025.
UK ETS Authority, UK ETS Maritime Scope Expansion Guidance and Supporting Documentation.
UK Government, UK Emissions Trading Scheme: Maritime Sector Expansion.
