The ETS is a cap and trade system where a limit (cap) is set on the right to emit specified pollutants over a geographical area and obliges companies to hold an emission right for  every tonne of co2 or other carbon gases they emit. With the ETS system, the EU will reduce emissions of greenhouse gases such as carbon dioxide (co2) from electricity production and industry (manufacturing and transport).

Implementation in the shipping industry

The European Union is extending the use of ETS to the shipping industry (which accounts for about 3% of total carbon dioxide emissions from human activities) from 1 January 2024.

Ship operators will need to secure EUA (European Union Allowance) for 40% of their emissions in 2024, for 70% of their emissions in 2025 and from 2026 for 100% of their emissions.

The income from the sale of emission rights will be used for the EU’s green fund.

TT-Line will therefore charge an ETS fee on all freight units to cover the additional costs of purchasing European Union (EUA) emission allowances.