Maritime operations analyst Hugo Federico Hernandez Varela. Image Credit: Hugo Federico Hernandez Varela

• Regulation puts the surrender duty on the shipping company; recovery from the charterer is contractual
• Maritime operations analyst Hugo Federico Hernandez Varela names four seams: no clause, no back-to-back, mismatched governing law, split forums
• Stakes rose in 2026 to 100% of emissions plus methane and nitrous oxide
• Builds on the Erasmus study that called the statutory reimbursement right a "paper tiger"

The EU ETS bill lands on the shipping company in full this year, but the right to pass it on to the charterer who decided the fuel and the voyage can fail at four distinct points in a charter chain, according to a new report by maritime operations analyst Hugo Federico Hernandez Varela, an independent analyst with more than 25 years in cargo, port, and ship agency operations,

"The regulator can name who should bear the cost and give another party the right to recover it," he writes.

"Whether that right arrives depends on a separate chain the regulator does not control."

The first break he identifies is the simplest: a head charter with no ETS reimbursement mechanism at all, and he notes that "many fixtures still running were agreed for a pre-full-scope or partial-scope world."

The second is a clause in the head charter that is not mirrored in the sub-fixture, which in his words "leaves the middle party carrying a cost it cannot pass down."

The third is governing law, since charters further down the chain "may be governed by other laws that characterise or limit that recovery differently."

The fourth is the forum.

"London arbitration in one link and a different jurisdiction clause in the next means recovery cannot be run as a single connected action down the chain," he writes.

The analysis builds on a study from the Erasmus School of Law reported by Ship & Bunker in July, which found the statutory reimbursement right in the ETS Directive close to a "paper tiger" in practice, leaving recovery to depend on what is written into the charterparty.

What is new in 2026, Hernandez argues, is the size of the sum travelling along that chain: full phase-in "raises the amount at stake to 100% of covered emissions, plus methane and nitrous oxide," while doing nothing to strengthen the contracts it has to pass through.

"In 2026 the obligation arrives whole," he concludes. "The right still has contracts to cross."

You can read the full analysis here and reach Varela here.