ETS is a cap-and-trade system where a limit (the cap) is set on the right to emit specified pollutants over a geographical area and obliges companies to hold an emission allowance for each ton of co2 or other carbon gases they emit. With the ETS, the EU will reduce emissions of greenhouse gases such as carbon dioxide (CO2) from electricity production and industry (manufacturing and transportation).

Implementation in the shipping industry

The European Union is extending the use of the ETS to the maritime industry (which accounts for about 3% of total CO2 emissions from human activities) as of January 1, 2024.

Ship operators will have to secure EUAs for 40% of their emissions in 2024, for 70% of their emissions in 2025 and from 2026 onwards for 100% of their emissions.

The proceeds from the sale of allowances will be used for the EU Green Fund.

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