What the UK ETS covers for shipping
The UK ETS applies to maritime activities by ships of 5,000 gross tonnage (GT) or more, regardless of flag state. It covers emissions of carbon dioxide, methane and nitrous oxide, expressed in CO2 equivalent, from two kinds of activity:
- Voyages between UK ports of call, including a voyage that starts and ends at the same UK port. A voyage runs from the last berth or ship-to-ship transfer in one UK port of call to the first berth or ship-to-ship transfer in the next, with no stop at a port of call outside the UK in between.
- In-port activities in a UK port of call: time at berth and movements within the port. These count even for a ship arriving from or leaving for a foreign port.
A voyage from a UK port to a port outside the UK is not covered. A port of call is a port where passengers or crew embark or disembark, or cargo is loaded or unloaded. Stops made only to refuel, take on supplies, change crew (other than on an offshore ship), go into dry dock, make repairs, shelter from bad weather or get help in distress are not ports of call, so they do not break a voyage.
Example from the official guidance
A 7,500 GT ship arrives at Southampton from Singapore, spends 18 hours unloading at berth, 2 hours moving between berths and 6 hours hotelling before it leaves. The voyage from Singapore is not covered, but all its emissions in Southampton are.
To make room for shipping, the UK ETS Authority added 9,323,546 allowances to the scheme cap, and the 2026 auction volume was raised by 983,000 allowances from 12 August 2026. See our UK ETS guide for how the wider scheme works.
Who has to comply: the maritime operator
The obligations fall on the maritime operator of each ship. That is the registered owner, unless the owner has passed all three of these to the ISM company under a legally binding written agreement:
- operation of the ship
- compliance with the ISM Code
- compliance with UK ETS obligations
If the ISM company runs the ship but the written agreement does not hand over UK ETS compliance, the registered owner stays the maritime operator. A delegation cannot be backdated: it takes effect only from the date the agreement is completed. The ISM company must sign a declaration of delegated responsibility, and the regulator must be told within 14 days if the agreement ends or changes in a way that affects it. If the regulator cannot identify who is responsible, it treats the registered owner as the maritime operator.
Which regulator you deal with depends on where your registered office or place of residence is:
| Registered office | Regulator |
|---|---|
| England, or outside the UK | Environment Agency |
| Scotland | Scottish Environment Protection Agency |
| Wales | Natural Resources Wales |
| Northern Ireland | Northern Ireland Environment Agency |
What is excluded
Ships under 5,000 GT are outside the scheme. So are:
- activities carried out only for military purposes, search and rescue, firefighting, humanitarian aid, other government functions, or official journeys by a reigning monarch, a foreign head of state or foreign ministers
- armed forces ships (including naval auxiliaries), wooden ships of primitive build and ships with no mechanical propulsion
- ships that operate a Scottish ferry service (the exemption covers ferries serving Scotland's islands and certain peninsular communities)
- ships mainly used for law enforcement, aids to navigation, government marine surveillance, fishing and fish processing, publicly funded research, coastguard or search and rescue work, or medical emergencies
- offshore ships, up to and including 31 December 2026
Positioning voyages and in-port activities linked to an excluded activity are excluded too. The UK ETS Authority will review the Scottish ferry and fishing exemptions, and whether to lower the 5,000 GT threshold to 400 GT, in 2028.
What a maritime operator must do
- Open an account in METS, the Manage your UK Emissions Trading Scheme reporting service. The Environment Agency creates the account when you email it your IMO company and registered owner number, operator name and a contact name and email address.
- Apply for an emissions monitoring plan within 42 days of starting your first UK ETS maritime activity, listing every ship you are responsible for, and pay the application fee. The fee also covers opening your maritime operator holding account in the UK ETS Registry.
- Monitor emissions from each covered voyage and port stay, using the methods in your plan.
- Report and verify: submit an annual emissions report, verified by a UKAS-accredited verifier, between 1 January and 31 March after each scheme year.
- Surrender allowances from your maritime operator holding account: one UK Allowance for each tonne of CO2 equivalent in your emissions figure for surrender.
The regulator decides a monitoring plan application within 2 months of it being duly made, unless it agrees a longer period with you. Duly made means submitted in full with the fee paid. Adding a ship, a new fuel or a new monitoring method is a significant change: apply to vary the plan at least 14 days before, or as soon as possible after if that is not practical. Minor changes can be made together by 31 December each year.
Monitoring methods
Your plan sets the monitoring method for each ship. There are four, set out in Part 4 of Schedule 2A to the Greenhouse Gas Emissions Trading Scheme Order 2020:
| Method | How fuel or emissions are measured |
|---|---|
| A | Bunker delivery notes plus periodic stocktakes of fuel tanks |
| B | On-board fuel tank readings, daily at sea and at each bunkering or de-bunkering |
| C | Flow meters on the combustion processes that emit |
| D | Direct measurement of emissions in the exhaust stacks |
A ship scheduled to make more than 300 voyages in a scheme year, with you as the intended maritime operator for them, and doing nothing but voyages and in-port activities, can use simplified monitoring. The operator then records annual fuel use by fuel type instead of fuel use voyage by voyage. The official example is a short sea ferry making 420 voyages.
Deadlines for 2026, 2027 and later years
The first scheme year was half a year, from 1 July to 31 December 2026. From 2027 each scheme year is the calendar year. To give new operators time, the UK ETS Authority allowed a single 'double surrender' for the first two years.
| Scheme year | Verified emissions report due | Allowances surrendered by |
|---|---|---|
| 2026 (1 July to 31 December) | 31 March 2027 | 30 April 2028 |
| 2027 | 31 March 2028 | 30 April 2028 |
| 2028 onwards | 31 March of the following year | 30 April of the following year, 23:59 |
A submitted emissions report cannot be amended: if you find an error, contact your regulator. If you do not report on time, the regulator will determine your emissions, may charge you for doing so and may issue a civil penalty. Operators who want a virtual verifier site visit must apply to the Environment Agency by 28 February. If the verifier finds non-conformities or recommends improvements, an improvement report is due by 30 June.
Surrender, the Northern Ireland deduction and penalties
Your emissions figure for surrender is your verified maritime emissions minus any surrender deduction. Only UK Allowances can be used. You must surrender by the deadline even if the figure has not yet been recorded in your account, or if you think the recorded figure is wrong.
Northern Ireland and Great Britain. Operators report all emissions on voyages between ports in Northern Ireland and Great Britain, but surrender allowances for only 50% of them. The Authority made this choice so routes between Great Britain and Northern Ireland face the same carbon price obligation as routes between Great Britain and the Republic of Ireland, where the EU ETS covers 50% of emissions. It says the deduction stays only as long as that disparity remains, so it would no longer apply if international voyages were brought into the UK ETS.
Eligible fuels. Fuels on the government's eligible fuels list are treated as having an emissions factor of zero. To claim, the fuel must be bought in the scheme year or the 3 months before it, delivered to a point of no return (such as the ship or a port fuelling system) by 31 March after the scheme year, and backed by proof of eligibility, purchase and delivery, its mass, and a declaration that it has not been counted elsewhere. The verifier checks each batch.
Excess emissions penalty
Missing the surrender deadline triggers a mandatory civil penalty of £100 per allowance not surrendered, adjusted for inflation. It applies even if you surrender in full afterwards, and you must still surrender the missing allowances.
Buying allowances and what it costs
Maritime operators get no free allocation: you buy allowances. You can receive them into your maritime operator holding account any time after it opens. Most participants buy on the secondary market from other UK ETS Registry account holders; allowances are first released mainly through fortnightly auctions. The Environment Agency cannot recommend sellers. Transfers between accounts happen only on working days between 10:00 and 16:00 UK time, and transfers to accounts not on your trusted account list wait an extra working day. Surrenders are not affected by either rule.
The cost moves with the market. The UK ETS Authority's official monthly average was £63.94 per allowance in October 2026. At that price, a fleet with 10,000 tonnes of CO2 equivalent to surrender would need allowances worth about £639,400. This is an illustration only: you pay whatever the price is when you buy. Track it on our UK carbon price page or with free price alerts.
What happens next
- 1 January 2027: offshore ships of 5,000 GT and above join the scheme, matching the EU ETS timeline.
- 31 March 2027: first verified emissions reports due, for July to December 2026.
- International voyages: in November 2025 the UK ETS Authority consulted on bringing a share of emissions from international voyages to and from the UK into the scheme, proposed from 2028. The consultation closed on 20 January 2026 and the Authority has not yet published its decision. The Authority says this is subject to negotiations with the EU: see our UK-EU ETS linking guide.
- 2028: review of the 5,000 GT threshold (possibly down to 400 GT) and of the Scottish ferry and fishing exemptions.
- 30 April 2028: first surrender, for 2026 and 2027 together.
The EU ETS also covers shipping, including 50% of emissions from international voyages that start or end in an EU member state, as the UK ETS Authority notes. See our EU ETS guide.
Questions
When did shipping join the UK ETS?
On 1 July 2026. The first scheme year for maritime operators ran from 1 July to 31 December 2026; from 2027 scheme years follow the calendar year.
Which ships are covered by the UK ETS?
Ships of 5,000 gross tonnage and above, under any flag, for emissions on voyages between UK ports of call and while in UK ports. Offshore ships join on 1 January 2027. Fishing vessels, Scottish ferry services, armed forces ships and some government ships are excluded.
Are international voyages covered?
Not yet. A voyage from a UK port to a port outside the UK is not covered, although emissions while the ship is in a UK port are. The UK ETS Authority has consulted on covering a share of international voyages from 2028 but has not announced a decision.
When do shipping companies first surrender allowances?
By 30 April 2028, covering both the 2026 and 2027 scheme years. Verified emissions reports are still due each year: by 31 March 2027 for 2026 and by 31 March 2028 for 2027.
Who is responsible, the shipowner or the ship manager?
The registered owner, unless it has transferred operation of the ship, ISM Code compliance and UK ETS compliance to the ISM company under a legally binding written agreement. Then the ISM company is the maritime operator.
Why do Northern Ireland routes pay for only half their emissions?
Operators surrender allowances for 50% of emissions on voyages between Northern Ireland and Great Britain, so these routes face the same carbon price obligation as routes between Great Britain and the Republic of Ireland, which the EU ETS covers at 50%.
How much does the UK ETS cost a shipping company?
One UK Allowance per tonne of CO2 equivalent. The official monthly average was £63.94 in October 2026, so 1,000 tonnes would cost about £63,940 at that price. Maritime operators receive no free allowances.
Sources
- Environment Agency: UK Emissions Trading Scheme for maritime, how to comply (22 June 2026) (checked 11 November 2026)
- UK ETS Authority: UK ETS scope expansion, domestic maritime, main Authority response (25 November 2025) (checked 11 November 2026)
- UK ETS Authority: UK ETS scope expansion, emissions from international maritime voyages (consultation, closed 20 January 2026) (checked 11 November 2026)
- UK ETS Authority: UK ETS policy overview (updated 21 October 2026) (checked 11 November 2026)
- UK ETS Authority: Taking part in the UK ETS markets (updated 10 November 2026) (checked 11 November 2026)
- UK ETS Authority: CCM trigger prices and average monthly prices, full table (updated 10 November 2026) (checked 11 November 2026)
- legislation.gov.uk: Greenhouse Gas Emissions Trading Scheme Order 2020 (SI 2020/1265), Schedule 2A (checked 11 November 2026)
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