Philippos Ioulianou, Managing Director, EmissionLink. Image Credit: EmissionLink

The European Commission's proposed expansion of the EU Emissions Trading System for maritime transport is an important development in regional climate policy. Yet the real test is not whether the system becomes more expansive, but whether it becomes more coherent, proportionate and effective.

Two concerns stand out. The first is the risk of overlapping carbon-pricing regimes as the International Maritime Organization moves towards its own global mechanism. The second is the widening gap between the revenues shipping is expected to contribute and the amount reinvested in maritime decarbonisation.

These questions are especially relevant to shipping centres such as Greece and Cyprus. Across the Eastern Mediterranean, shipowners, managers and offshore operators face an increasingly demanding compliance environment. As their regulatory exposure grows, so does the commercial importance of understanding how carbon costs will be allocated, managed and recovered.

The planned inclusion of offshore activities from 2027 illustrates the challenge. Offshore worksites are set to be treated as ports of call, bringing more support-vessel activity within the ETS. In practice, however, offshore shipping does not fit neatly into a conventional port-to-port model.

Offshore vessels may remain on location for extended periods, serving projects where fuel use, operational control and emissions responsibility are divided among owners, charterers, contractors and developers. The ETS therefore becomes not merely a reporting issue, but a contractual and commercial one. Responsibility for monitoring emissions, acquiring allowances and bearing carbon-price exposure will increasingly need to be addressed in charterparties and project agreements.

The Commission's proposal to bring certain categories of vessels between 400 and 5,000 GT into the EU ETS from 2029 will also have significant implications. Many smaller commercial and offshore operators are likely to enter a system designed around larger organisations with dedicated compliance teams, established data processes and greater access to carbon-market expertise. Broader coverage may be justified, but implementation must remain proportionate.

There are welcome elements in the proposals. Greater alignment between MRV and FuelEU Maritime reporting should reduce duplication and the risk of inconsistent submissions. Changes to transhipment rules are also intended to limit circumvention and protect the system's integrity.

However, these proposals do not resolve how the EU ETS will coexist with a future IMO carbon-pricing framework. The Commission has acknowledged the possibility of double payment, but acknowledgement is insufficient. Applying regional and global charges to the same emissions without a clear reconciliation mechanism would create unnecessary costs and uncertainty.

Shipping should not pay twice for the same tonne of emissions. If both systems remain, there must be an automatic, transparent and workable method for recognising payments and reconciling liabilities. This should also apply to revenue allocation. Shipping is expected to contribute substantially to the ETS, yet only a limited share appears destined for maritime decarbonisation. This imbalance risks undermining confidence in the policy.

I would argue that at least 50% of ETS revenues generated by shipping should be reinvested in maritime decarbonisation at national level. Support should also be extended across sustainable fuels, port infrastructure, vessel retrofits and credible energy-efficiency technologies. Carbon pricing can reduce emissions only when matched by practical investment that enables the industry to move forward.

For shipping companies, the ETS is no longer simply a compliance requirement. It is a core commercial consideration affecting costs, contracts, investment decisions and competitiveness. Companies like EmissionLink, with a presence in Greece and Cyprus allows them to combine local market knowledge with specialist expertise, helping companies turn evolving emissions rules into practical compliance and commercial strategies.

Ultimately, the credibility of the EU ETS will depend not on how much money it raises, but on whether it delivers fair treatment and meaningful emissions reductions for the industry which is expected to fund it.