BIGGEST CHALLENGES FOR EU ETS COMPLIANCE

The European Union Emissions Trading System (EU ETS) is a carbon market operating on a cap-and-trade model that aims to reduce greenhouse gas emissions through economic instruments. The system, which entered into force in 2005, is the world's first large-scale emissions trading system. It is a cornerstone of the EU's goal of "a climate-neutral continent by 2050."

CALCULATE EMISSION COSTS CORRECTLY
Cost calculation under the EU ETS is not limited to measuring CO₂ per ton. It requires consideration of many variables, including route changes, fuel type differences, engine performance, EUA unit prices, and exchange rates. This complex system requires integrated digital solutions that go beyond simple calculation tools.

ENSURING CARBON TRANSPARENCY ACROSS STAKEHOLDERS
Since ship operations involve numerous stakeholders, the need for clear, reliable, and real-time sharing of carbon data across all parties has become critical. Differing data standards, varying operating conditions, and incomplete digital infrastructure make this transparency challenging.

MANAGING CARBON RISK
Carbon is no longer just an environmental risk; it's a financial one. Fluctuating EUA prices, managing carbon contracts, and spot-market monitoring require managing carbon risk alongside fuel and freight. This requires a new approach to risk management and financial literacy.

ENSURING REPORTING AND DOCUMENTATION COMPLIANCE
The accuracy of emissions data, as well as how it is reported, is a key component of EU ETS compliance. MRV reporting, verification documentation, carbon reflection in financial statements, and simultaneous compliance with multiple regulations create a significant document management burden for companies.

HOW DOES EU ETS WORK?

The EU ETS is a carbon market operating on a "cap and trade" model. Each year, the European Union sets an aggregate emissions limit for sectors participating in the system. This limit is divided into digital rights called carbon permits (EUA). Each EUA represents the right to emit 1 ton of carbon dioxide (CO₂).

For the maritime industry, this means the following:

If a ship enters a European Union port and emits a certain amount of emissions, it must obtain and surrender a sufficient amount of carbon permits in exchange for these emissions. The amount of emissions is calculated based on factors such as fuel type, sailing duration, and ship type.

Ships can sell excess permits or purchase permits from the market as needed. This makes carbon a costly resource, and businesses are incentivized to shift to lower-emission operations.

WHO DOES IT COVER?

While the EU ETS was initially designed for the energy and heavy industry sectors, the maritime sector will also be included in this system by 2024. Ships and activities considered within the scope of the application are classified according to specific criteria:

Cargo and passenger ships of 5,000 GT (gross tonnage) and above,

Ships navigating between European Union ports,

Ships on international voyages departing from or arriving at an EU port,

Activities that cause emissions in EU territorial waters.

Even if a ship is not EU-flagged, it is subject to the system if it berths in or departs from an EU port.

The scope of the system will continue to expand in the coming years. It is expected that smaller segments such as offshore vessels and special-purpose vessels will also be included in the scope in the future.

Ship Type Coverage Status:
Cargo ship over 5000 GT ✔️
Container ship leaving an EU port ✔️
Fishing boat operating outside an EU port ❌
Ro-Ro ship docking in the EU ✔️