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Shipping UK ETS

Shipping UK ETS

As part of the UK Government’s expansion of the UK Emissions Trading Scheme (UK ETS), the maritime sector has been included in the scheme from 1 July 2026. Commercial ships of 5,000 gross tonnage (GT) and above calling at UK ports are required to monitor, report, verify, and surrender United Kingdom Allowances (UKAs) for their greenhouse gas (GHG) emissions. The scheme applies regardless of a vessel’s flag state and covers Carbon Dioxide (CO₂), Methane (CH₄), and Nitrous Oxide (N₂O) emissions.  

Following the revocation of the UK MRV Regulations on 3 April 2026, maritime emissions are regulated under the UK ETS. Normec Verifavia provides independent UK ETS verification services, supporting shipowners, ship managers, and maritime operators in meeting UK ETS monitoring, reporting, verification, and compliance requirements. 

Note: Normec Verifavia is already accredited to provide verification services under the UK MRV regime. The extension of our accreditation to include UK ETS verification is currently in progress. Operators may already submit their emissions data and supporting documentation to facilitate a timely verification process once the UK ETS accreditation has been granted.

Why choose Normec Verifavia?

  •  Maritime Verification Expertise: Extensive experience delivering independent verification services across maritime environmental regulations.  
  •  Digital Integration: API-enabled solutions and streamlined digital workflows support efficient collection, validation, and verification of emissions data, reducing manual effort and improving data quality. 
  •  Efficient and Reliable: Our structured verification process enables timely verification of Annual Emissions Reports (AERs), supporting operators meet UK ETS reporting and compliance deadlines. 

Note: Normec Verifavia is already accredited to provide verification services under the UK MRV regime. An extension of its accreditation to cover UK ETS verification is currently in progress and awaiting formal approval. In the meantime, operators may submit their emissions data and supporting documentation, enabling verification activities to begin promptly once the UK ETS accreditation has been granted.

Scope of the UK ETS 

The UK ETS applies to commercial cargo and passenger ships of 5,000 gross tonnage (GT) and above calling at UK ports, regardless of flag state. The scheme covers greenhouse gas emissions generated during qualifying voyages and port calls. 

The UK ETS currently applies to: 

  • Cargo and passenger ships of 5,000 GT and above.  
  • Offshore vessels of 5,000 GT and above from 1 January 2027.  
  • Carbon Dioxide (CO₂), Methane (CH₄), and Nitrous Oxide (N₂O). Methane and Nitrous Oxide are reported as carbon dioxide equivalent (CO₂e). 

Greenhouse gas emissions are calculated on a tank-to-wake basis, with methane (CH₄) and nitrous oxide (N₂O) converted to carbon dioxide equivalent (CO₂e) using IPCC AR5 Global Warming Potential values. 

Geographic Scope of Emissions 

The UK ETS determines emissions liability according to the voyage profile and location of port calls. 

  • 100% of at-sea and at-berth emissions for voyages between UK ports, including cruises that begin and end at the same UK port.  
  • 50% of at-sea emissions and 100% of at-berth emissions for voyages between Great Britain and Northern Ireland.  
  • 0% of at-sea emissions and 100% of emissions generated while at berth in a UK port for voyages between the UK and EU/EEA Member States or international ports.  
  • For voyages involving UK Overseas Territories and Crown Dependencies, only emissions generated while at berth in UK ports are subject to the scheme. 

The reduced surrender obligation for voyages between Great Britain and Northern Ireland has been introduced to minimise carbon pricing disparities and avoid unintended changes to vessel routing. 

Exemptions 

The UK ETS provides exemptions for selected vessel types and operations. These include: 

  • Government Non-Commercial Activity: Military, customs/border force, police, coastguard, search and rescue, firefighting, humanitarian aid, and government research vessels are entirely exempt from reporting or surrender obligations.  
  • Commercial Fishing: Fish-catching and fish-processing ships are excluded to maintain alignment with the EU ETS, where fishing fleets remain outside carbon pricing.  
  • Scottish Ferry Infrastructure: Ferries over 5,000 GT serving Scotland’s islands and remote peninsular communities are exempt from the scheme. This protects vital supply lines from ticket and freight price impacts, honouring the legal provisions of the Islands (Scotland) Act 2018.  

The current 5,000 GT threshold and exemption framework will be reviewed in 2028, including consideration of lowering the threshold to 400 GT. 

Compliance Requirements 

UK ETS compliance is managed at company level and covers all ships under an operator’s responsibility that fall within the scope of the scheme.  

Operators must establish a company-level Emissions Monitoring Plan (EMP) covering all in-scope vessels and continuously monitor emissions throughout the reporting period. 

At the end of each reporting year, operators must compile a company-level Annual Emissions Report (AER), which must be independently verified by a UKAS-accredited verifier before submission through the Manage the Emissions Trading Scheme (METS) platform. 

The Registered Owner remains legally responsible for compliance but may formally delegate these responsibilities to the vessel’s ISM Company or Document of Compliance (DOC) holder through a signed mandate.

UK ETS Timeline: Key Dates You Cannot Miss 

The maritime UK ETS follows a phased implementation schedule. 

Date Milestone
Until 30 June 2026 Voluntary onboarding period for account registration and Emissions Monitoring Plan (EMP) submission
1 July 2026 Maritime UK ETS enters into force
31 March 2027 Deadline for the first verified Annual Emissions Report (AER) covering the 2026 reporting period
30 April 2028 First UK Allowance (UKA) surrender deadline covering both the 2026 partial reporting period and the full 2027 reporting year

Financial Compliance 

  • Under the UK ETS, operators are required to purchase and surrender United Kingdom Allowances (UKAs) equivalent to their verified greenhouse gas emissions. 
  • Unlike some other sectors, maritime operators receive no free allocation of UKAs. Allowances must be obtained through government auctions or the secondary carbon market. 
  • EU Allowances (EUAs) cannot be used to satisfy UK ETS obligations.

Digital Compliance 

The UK ETS is administered through two digital platforms. 

  • Manage the Emissions Trading Scheme (METS) is used to submit Emissions Monitoring Plans, Annual Emissions Reports, and communicate with regulators.  
  • The UK Emissions Registry used to manage UK Allowances (UKAs), including receiving, transferring and surrendering allowances. 

Unlike some international compliance regimes, the UK ETS does not issue a physical Document of Compliance (DoC). Compliance is managed entirely through digital systems. 

What Happens if You Do Not Comply? 

Failure to comply with UK ETS obligations may result in significant financial and regulatory consequences. 

  • Civil penalties of £100 per tonne of CO₂e for emissions not covered by surrendered UK Allowances (UKAs).  
  • Payment of the penalty does not remove the original compliance obligation.  
  • Operators remain responsible for purchasing and surrendering outstanding UKAs.  
  • Continued non-compliance may lead to increased regulatory scrutiny, enforcement action, and reputational impacts with customers, charterers, financiers, and other stakeholders. 

Commercial Considerations 

The UK Government does not prescribe how carbon costs should be allocated between shipowners and charterers. 

Operators should ensure charter party agreements clearly define responsibilities for: 

  • UK Allowance procurement.  
  • Carbon cost allocation.  
  • Emissions data sharing.  
  • Liability for non-compliance.  

Industry-standard contractual clauses, including those published by BIMCO, can assist in allocating UK ETS responsibilities and carbon costs between commercial parties.

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Process
  1. Emissions Monitoring Plan (EMP)

    Prepare and submit a company-level Emissions Monitoring Plan (EMP) through the METS platform to the assigned UK regulator for approval. 

  2. Emissions Monitoring

    Monitor and record emissions from all in-scope vessels throughout the reporting period in accordance with the approved EMP. 

  3. Annual Emissions Report (AER)

    Compile a company-level Annual Emissions Report (AER) containing emissions data for all vessels covered under the UK ETS. 

  4. Independent Verification

    The Annual Emissions Report is independently verified by a UKAS-accredited verifier to confirm compliance with UK ETS monitoring and reporting requirements. 

  5. UK Allowance Surrender

    Submit the verified AER through METS and surrender the required United Kingdom Allowances (UKAs) through the UK Emissions Registry to fulfil annual UK ETS compliance obligations. 

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FAQ

Find answers to the most commonly asked questions

When does the UK ETS apply to my vessels?

The UK ETS applies from 1 July 2026 to commercial cargo and passenger ships of 5,000 GT and above calling at UK ports, regardless of flag state. Offshore vessels of 5,000 GT and above are included from 1 January 2027. Operators should begin monitoring emissions from the applicable start date and ensure all reporting and compliance requirements are met.

Which emissions and voyages are covered under the UK ETS?

The UK ETS covers CO₂, CH₄ and N₂O emissions on a tank-to-wake basis. The percentage of emissions subject to the scheme depends on the voyage:

  • 100% of at-sea and at-berth emissions for voyages between UK ports.
  • 50% of at-sea emissions and 100% of at-berth emissions for voyages between Great Britain and Northern Ireland.
  • 0% of at-sea emissions but 100% of emissions while at berth in a UK port for voyages between the UK and international or EU/EEA ports.

Who is responsible for UK ETS compliance?

The Registered Owner is legally responsible for complying with the UK ETS. However, these responsibilities may be formally delegated to the vessel’s ISM Company or DOC holder through a signed mandate or legally binding agreement. Operators should ensure responsibilities for monitoring, reporting, allowance surrender and carbon cost allocation are clearly documented.

What are my annual UK ETS compliance obligations?

Operators must:

  • Prepare and maintain a company-level Emissions Monitoring Plan (EMP).
  • Monitor emissions from all in-scope vessels.
  • Submit a verified Annual Emissions Report (AER) through METS.
  • Surrender the required UK Allowances (UKAs) through the UK Emissions Registry.

For the first reporting period (1 July–31 December 2026), the verified AER is due by 31 March 2027, while the first UKA surrender deadline is 30 April 2028.

What happens if I fail to comply with the UK ETS?

Failure to surrender sufficient UK Allowances (UKAs) may result in a civil penalty of £100 per tonne of CO₂e not covered by allowances. Paying the penalty does not remove the original compliance obligation—operators must still purchase and surrender the outstanding UKAs. Continued non-compliance may also lead to regulatory enforcement and reputational risks.