FEATURE: Big Players Covered, Smaller Firms Rush as Shipping's EUA Deadline Approaches

Companies must surrender EUAs covering 40% of their verified emissions for the calendar year 2024 by September 30. File Image / Pixabay

The shipping industry is heading toward its first major compliance deadline under the European Union's Emissions Trading System (EU ETS). 

Since January 2024, vessels over 5,000 GT calling at EU/EEA ports have been required to monitor CO2 emissions. By September 30, 2025, operators must surrender EU Allowances (EUAs) covering 40% of their verified 2024 emissions.

While larger shipping firms appear to be mostly prepared, a late wave of activity is now emerging from smaller and non-EU owners.

To assess market readiness, Ship & Bunker spoke with ACT Financial Solutions, Bridge Markets Ltd, Grey Epoch Europe, Varuna Marine Services BV, and Veracity by DNV—firms closely involved in helping shipping firms navigate EUA procurement and compliance.

Larger Firms Ahead of the Curve

Many major shipping companies appear to be ahead of schedule in preparing for the first EUA compliance deadline. These firms have already set up registry accounts, formed procurement strategies, and in many cases are passing EUA costs on to charterers using BIMCO-recommended clauses.

"We have good visibility across the market, with our clients operating around 1,500 vessels and Grey Epoch itself trading over 1 billion ETS instruments annually," Emilio Fontana, Head of Business Development at Grey Epoch Europe, said.

"Based on what we see, there hasn't yet been a meaningful uptick in compliance-driven EUA buying from the shipping sector."

Fontana added that "most shipping companies, particularly the larger operators, have now set up their registry accounts and appear to be procuring allowances periodically throughout the year, rather than leaving it to the last moment."

Dominic Ng, Head of APAC at Veracity by DNV, noted a related trend.

"Not necessarily of ordering, but we have recently noticed a burst of activity from our Emissions Connect user community to get their end-of-voyage statements organised.

"This uptick suggests that many shipping companies are now preparing to finalise their EUA procurements ahead of the upcoming surrender deadline in September," Ng said.

Varuna Marine Services BV saw a rise in EUAs activity from shipping between June and July.

"From mid June to mid July our desk cleared ~6.2 million EUAs for pure shipping counterparties—a ~34 % jump on the Q1 weekly average," a Varuna representative said.

"More than 2 600 maritime operator accounts are now live in the Union Registry, up sharply since May."

Late Moves by Smaller Owners

While big players are well prepared, many smaller or non-EU owners are only now starting to act. Some are still working on registry setups, or just beginning to define procurement strategies.

"While the larger shipping lines and owners are largely covered and completed 2024 obligations, a great number of smaller owners have been waiting and watching the market, but realising the prices are not fluctuating significantly, have moved to buy last allowances to complete their balance," Anthony Mollet, Commercial Manager at Bridge Markets Ltd, said.

Dario Pabst, Desk Manager at ACT Financial Solutions in Amsterdam, mentioned they are seeing a few latecomers entering the market now.

"We see quite a few late comers entering the market for their 2024 needs now, as many maritime entities were also late for their verified emission reporting," he said.

"There is an influx of new counterparts, but also new orders being placed."

Fontana added that late engagement is more common outside the EU.

"The main exceptions are smaller-sized shipping firms based outside the EU, such as those in Türkiye, the US, and Singapore," he said.

"Some of these firms are still in the process of setting up the necessary accounts or determining their procurement strategy and are more likely to engage in last-minute purchasing."

Minimal EUA Price Impact Expected

Despite the recent activity, experts agree that the overall impact on EUA prices is expected to be limited.

They argue that shipping remains a relatively small portion of the EU ETS, especially under the current 40% surrender rule.

"No, it should not have a significant impact on the market overall, as the maritime industry is a small part of the total market," Pabst said.

"Verified emissions were around 70M tonnes in total, and they only have to surrender EUAs for 40% of that in the first year. Given a market size of ca 1.1B overall, that is around 1.75% of the total market. So even if there is a 'latecomer' percentage of 33%, we will not experience too significant a push." 

Fontana echoed the point: "Under a (too) conservative assumption, that none of the remaining shipping companies have purchased yet, this would leave around 46 million EUAs to be acquired 'last minute'.

"For comparison, over 20 million EUA instruments trade on the exchange daily. In practice, any last-minute buying is expected to be distributed over several weeks, likely across August and September."

Mollet added that the belief among some shipping players that prices will spike may not be grounded in market fundamentals.

"The ETS market reports we read and share with customers show almost no trend in price changes relating to anything in the maritime sector.

"Many are saying exactly this, that there will be price increases with last-minute buying.

"But this only highlights how naïve the shipping industry is to the EU ETS, as there is no evidence, nor any market commentators suggesting this will be the case," Mollet noted.

Varuna Marine Services BV expect a moderate effect on EUA prices.

"Demand is front loaded into a 6 week window while auction supply is fixed, so we anticipate a €3–4 t premium emerging in Aug/Sep strips versus the benchmark Dec 25 future (last print €70.06 t on 21 Jul)," the firm noted.

Final Push Coming?

As the deadline draws closer, industry watchers expect a some concentrated wave of activity through August and into September. The overlap with Europe's summer vacation season may complicate matters further.

"From the maritime sector, yes, but on the stationary side, the last push will likely come in September," Pabst said. "So, again, it is vital that players start hedging ASAP, even if it already feels 'late'."

Ng anticipates an increase in compliance-related activity in the coming weeks.

"We anticipate increased activity in August, particularly from shipowners and managers seeking to verify emissions data to accurately calculate the EUAs required for surrender. There may also be heightened legal and contractual reviews to clarify obligations under ship management and charter party agreements."

Mollet noted that many firms are still behind. "It is abundantly clear that a great deal of shipping companies has not bought all, or in some cases any, EUAs. There are companies waiting to complete setting up the MOHA account even. On that basis, there is highly likely to be some late/pent-up demand ahead of what might be impending threats of penalties by the authorities."

He warned against complacency: "With many staff away on long summer vacations, September is going to come as a shock to many. The deadline is 30th September, but there are still companies predicting a delay or extension to this deadline by the EU. Again, there is no evidence for this."

Fontana added that while the market is unlikely to move dramatically, activity may pick up.

"In practice, any last-minute buying is expected to be distributed over several weeks, likely across August and September. In the past, the compliance deadline in April frequently saw a rise in prices for that month, on average, about a 10% increase month-over-month for the previous 10 years.

"However, since the deadline moved to September last year, that seasonal pattern appears to have softened — August (+1.9%) and September (-6.4%) 2024 did not see the same pronounced impact, Fontana concluded.

Varuna Marine Services BV says over 60% of spot buys occur 4–6 weeks pre-deadline - shipping is on the same track.

"VMS' order book shows ≈45 % of maritime customers still unhedged for >50 % of their 2024 requirement, implying another 15–18 Mt EUAs yet to transact, it said.

"While the absolute volume is small relative to total EU ETS supply, the timing concentration ahead of the 30 September surrender deadline is creating a pronounced—but temporary—tightness that traders need to navigate carefully," Sanjeev Wewerinke Singh, Director at Varuna Marine Services BV, said.

How Much Does It Cost to Comply?

Image Credit: Ship & Bunker

Shipping companies are required to surrender EUAs covering 40% of their verified emissions from 2024 by September 2025, with coverage increasing to 70% in 2025.

EUAs can be purchased on exchanges such as ICE or through the over-the-counter (OTC) market.

As of July 25, 2025, one EUA was priced at approximately €71/mtCO2e (about $82.97/mtCO2e).

According to Ship & Bunker estimates, based on current bunker prices at Rotterdam, the EUA cost adds a 20.5% premium to VLSFO on intra-EU voyages for 2024 compliance. That impact will climb to around 35.8% for 2025 compliance, when 70% of emissions must be covered.

Click here to view Ship & Bunker's latest and historical data on compliance costs, as well as additional information on the EU ETS. 

Grey Epoch Europe Limited is an appointed representative of Thornbridge Investment Management LLP, which is authorised and regulated by the Financial Conduct Authority.