UK Emissions Trading Scheme

As Members will be aware, on 1 July 2026 the UK Emissions Trading Scheme 2021 (UK ETS) was extended to include maritime transport. The governing legislation is the Greenhouse Gas Emissions Trading Scheme Order 2020 (“the Order”).

Scope

The scheme currently applies to domestic voyages between UK ports.  Importantly, and by way of clarification of the article in our February ’26 Circular, it also applies to all emissions generated whilst a vessel is in a UK port, regardless of whether the emissions from the voyage to or from that port are themselves within the scope. 

This is an important point members should be aware of, since it brings a significantly wider pool of vessels within the scope of UK ETS, including those engaged in international voyages that call at a UK port.

The surrender obligations can be summarised as follows:

Voyage                     Voyage emissions                Port-stay emissions

Domestic voyage                100%                          100% at both UK ports
between UK ports

Voyage between                  50%                           100% at both ports
Northern Ireland 
and Great Britain

International voyage          None                          100% during the UK port stay
to or from the UK

Compliance

Allowances must be surrendered by 30th April each year. The first surrender deadline is 30 April 2028, which includes both the 2026 and 2027 reporting periods. 

Responsibility for Compliance

The default responsible entity is the registered owner.  As under EU ETS, responsibility for compliance may be transferred from the registered owner to the vessel’s ISM Company. The requirements for doing so are however specific to the UK ETS. 

The registered owner and ISM company must have “agreed in writing” that the ISM company is responsible for compliance with UK ETS. Environment Agency guidance states that the registered owner may delegate its compliance obligations to the ISM company under a “legally binding written agreement”. 

The ISM Company must complete a declaration of delegated responsibility in METS (the UK Emissions Trading Scheme reporting service). The declaration must include the prescribed confirmations that the ISM company:

• Has assumed responsibility for operation of the ship; 
• Has agreed to take over responsibility for ISM; and 
• Has entered into a legally binding written agreement with the registered owner of the ship to comply with the obligation of the maritime operator under the Order in respect of that ship; and 
• Accepts full legal liability under the Order arising from any failure to comply with the obligations of the maritime operator under the Order in respect of the ship.

The Environment Agency guidance further clarifies that the delegation can only take effect on or after the date the legally binding written agreement is completed. It is not permissible to back date the delegation of UK ETS responsibility. 

Any changes to, or termination of, the written agreement must be notified to the regulator within 14 days. 

The regulator may require production of the written agreement and related documents to verify the existence and nature of the agreement. 

Members should therefore ensure that any proposed delegation is documented properly, and the required declaration submitted through METS. 

Contractual considerations

Members should review the ETS clauses in their contracts to ensure that they cover the UK ETS and require allowances to be transferred sufficiently early to enable the responsible entity to meet the 30 April surrender deadline. This is particularly important where the ETS clause provides for allowances to be transferred annually, since the surrender deadlines under EU ETS and UK ETS are not aligned. 

Nordisk is available to assist its Members on these issues.

1.  Greenhouse Gas Emissions Trading Scheme Order 2020 Schedule 2A, para.3.(2)
2. UK Emissions Trading Scheme for maritime: how to comply, issued by Environment Agency, 22 July 2026