On EU ETS scope, a key feature of the Commission’s proposal, which was expected, is the inclusion of smaller offshore ships between 400 and 5,000 GT within the scope of EU ETS from 2031, alongside a series of other smaller ships including oil and chemical tankers. The proposal also extends existing derogation for ice-class ships, for voyages involving outermost regions and small islands without a fixed land connection until 2035.
Positively, the proposals begin to address long-standing challenges with the terminology “Port of Call,” by introducing a series of offshore-specific definitions, such as “offshore operations” and “offshore worksite,” and updating the definition of “port of call” for ships performing or supporting offshore operations.
While further refinement is still required, these changes represent an important recognition that offshore vessels operate differently from conventional cargo or passenger ships and is a response to consistent proactive feedback from the industry.
IMCA also welcomes the Sustainable Maritime Alternative Propulsion (SMAP) initiative, to encourage the uptake of alternative fuels and zero-emission technology. The mechanism would allow up to 110 million allowances to be reserved, between January 1, 2028 to December 31, 2040, to support the price differential between fossil and sustainable maritime fuels and the deployment of zero-emission technologies.
However, limiting the origin of renewable fuel production to the EU and countries with a linked ETS is a significant barrier to industry being able to utilize the benefit. Renewable fuels remain globally nascent, and the EU renewable fuel production industry is still at an early stage, therefore all renewable fuels recognized under FuelEU Maritime should be recognized in the short term—regardless of where they are produced.
The proposals are a positive step in the right direction; however, the changes highlight a need for greater interim guidance. The proposals are working to fix the current system; therefore industry should not be expected to work with a broken framework until the new rules are in place. Updated thorough guidance would also address the significant challenges of how the EU and UK ETS will interact with each other, and how double penalty will be avoided, when both schemes come into effect for offshore vessels over 5,000 GT from January 2027.
Sophia Haywood, Director of Policy & Advocacy, said: “The Commission’s proposals show some welcome progress in recognizing the specific nature of offshore operations. Offshore vessels do not operate in the same way as conventional cargo ships, and it is important that EU ETS and EU MRV rules reflect the realities of offshore vessels, project-based operations and complex cross-border activity.
“However, important challenges remain. The offshore sector needs clear, workable and proportionate rules that support effective compliance without creating unnecessary administrative burdens. Updated guidance to address long-standing issues will be essential before the revised MRV and ETS changes take effect.”
The proposals are not yet final and will now proceed through the EU legislative process. If adopted, the revised EU ETS rules would come into force from 2031, while the revised EU MRV Regulation would apply from January 1, 2029. Until then, industry would continue to operate under the existing EU ETS & MRV framework.
IMCA will continue to assess the proposals in detail with the Marine Policy & Regulatory Affairs (MPRA) Committee and engage with EU institutions and stakeholders as the legislative process progresses.
