The cost of CO2 emissions spikes

Shipping in Europe will face another heavy and absolutely measurable cost from the beginning of 2026, as the EU Emissions Trading System (EU-ETS) enters a significantly stricter implementation phase, turning CO2 emissions into a net operating expense for ships.

According to data from Ship & Bunker, at the end of 2025, shipowners paid an average of approximately 220 dollars per tonne of VLSFO for carbon emissions to comply with the EU emissions trading system EU-ETS on voyages within the European Union.

From 1 January 2026, with full coverage of emissions by 100%, this cost increases by approximately 45%, reaching 319 dollars per metric tonne of fuel.

A central role in the calculation is played by the EUA (European Union Allowance), i.e. the right to emit one ton of CO2, which functions as a “carbon currency” and is traded on the market.

Ship & Bunker’s calculations used a hypothetical fixed EUA price of 85.02 to clearly capture the impact of the new rules on fuel costs.

To put this into context, the average price of very low sulphur marine fuel (VLSFO) in the EMEA region (Europe, Middle East and Africa)  stood at 464.50/metric ton at the end of 2025.

At the same time, European policy is being further tightened with the implementation of FuelEU Maritime from 1 January 2025, which does not “price” emissions, but rather imposes the gradual use of lower emission fuels.

The regulation applies to ships over 5,000 GT calling at EU ports. and sets escalating reduction targets until 2050.

In practical terms, the combination of the EU-ETS and FuelEU Maritime signals that for shipping operating in Europe, simply paying the cost of carbon is no longer enough.

Compliance requires fuel changes, investments and strategic adjustments, making carbon costs one of the most decisive factors of competitiveness in the coming years.

The increase in the cost of the EU-ETS is not sudden, but the result of the gradual implementation of the system.

For emissions produced in 2024, shipowners were required to cover only 40% of the compliance costs.

In 2025, this percentage increased to 70%, while from 1 January 2026 the cost is now covered at 100%.

The regulation concerns ships over 5,000 GT that approach EU ports and provides that the emissions of each calendar year are “paid off” by the purchase and delivery of emission allowances (EUA) by September of the following year.

Thus, the 2025 emissions are paid in September 2026, but only at 70%, while in September 2027 shipowners will be required to pay 100% of the cost for the 2026 emissions.

Higher emission rates

2026 brings another, less visible but equally decisive change: the increase in the emission rates used to calculate the number of EUAs (European Union Allowances) per tonne of fuel.