The European Union’s (EU) efforts to reduce transport carbon emissions are entering a new phase in 2025. An upcoming expansion of the Emissions Trading System (ETS) launches in 2025, and carriers are reporting that shippers will face hefty increases in their ETS surcharges. These increases come at a time when the EU is also tightening its regulations on fuel usage, forcing carriers to adopt more costly lower-emission fuels.
EMISSIONS TRADING SYSTEM (ETS)
Starting January 1, 2025, shipping companies must purchase allowances for 70% of their greenhouse gas (GHG) emissions—an increase from 40% in 2024. This expansion is part of a phased plan to fully account for 100% of emissions by 2026. Carriers warn that their ETS surcharges could nearly double under the updated regulations, costs that will likely be passed on to shippers.
The ETS for maritime transport includes:
- 100% of emissions from ships on voyages within the European Economic Area (EEA).
- 50% of emissions from voyages beginning or ending outside the EEA.
- 100% of emissions produced when ships are within EEA ports.
FUELEU MARITIME REGULATIONS
Complementing the ETS, the FuelEU Maritime regulations that took effect on January 1, 2024, require carriers to adopt sustainable fuels. The goal is to reduce the GHG intensity of ships operating in the EU and EEA by 2% in 2025 compared to 2020 levels, with an ultimate target of an 80% reduction by 2050.
Non-compliance penalties are steep — €2,400 per metric ton of fuel that fails to meet the standards. In response, carriers are increasing their reliance on biofuels and other low-emission alternatives, which may exempt shippers from ETS surcharges.
MITIGATING COSTS THROUGH SUSTAINABILITY
As the 2025 ETS increase approaches, shippers can proactively reduce emissions and manage costs by exploring sustainable freight options. Partnering with forward-thinking logistics providers like Green Worldwide Shipping® ensures access to sustainable fuel solutions and innovative technologies such as GreenCheck, a proprietary ESG management platform.
GreenCheck enables logistics teams to calculate, heat map, and mitigate Scope 3 transportation and (T&L) emissions effectively. By leveraging this technology, shippers can align with their sustainability objectives while navigating the evolving regulatory landscape.
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