UK MRV and UK ETS

UK ETS Maritime Expansion

The UK Emissions Trading Scheme (UK ETS) replaced the UK’s participation in the European Union Emissions Trading Scheme (EU ETS) on 1 January 2021. The scope of the UK ETS has expanded to domestic maritime from July 2026, introducing a cap-and-trade system, similar to the EU ETS framework. 

Application of UK ETS for Shipping

The UK ETS expansion to maritime will apply to ships of 5,000 GT and above and will cover carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O) emissions in alignment with the EU ETS regime. The greenhouse gas emissions will be calculated on a carbon dioxide equivalent (CO₂e) basis, based on their Global Warming Potential (GWP):

• CO₂: GWP of 1 per tonne
• CH_4: GWP of 28 per tonne
• N₂O: GWP of 265 per tonne

The emissions in scope are the following:

• Emissions from domestic voyages, defined as those between UK ports, including those which start and end at the same port. The definition includes emissions while at anchor and while moored.
• Emissions within UK ports, comprising emissions at berth in UK ports and emissions from movements within UK ports, regardless of whether the voyage is domestic or international.

The scheme will use a Tank-to-Wake emissions accounting approach with standard emission factors for conventional fuels. Sustainable fuels of biological and non-biological origin will be zero-rated.

Coverage and Exemptions

UK ETS will cover 100% of emissions from domestic voyages and port activities. The UK ETS Authority intends to expand the scheme from 2028 to include emissions from international maritime voyages starting or ending in the UK. These voyages will be subject to the UK ETS carbon price for 50% of their emissions, in line with the current EU ETS scope.

A 50% deduction from UK ETS surrender obligation will be granted for voyages between Northern Ireland and Great Britain, to avoid disparities until international voyages are included.

The following exemptions are provided, subject to review in 2028:

• Ferry services to Scotland’s islands and certain peninsular communities.
• Fish catching and fish processing ships.

Implementation Timeline

The UK ETS maritime regime launched on 1 July 2026, so all compliance obligations apply from this date.

• First scheme year: 1 July – 31 December 2026
• Subsequent scheme years: Calendar year (1 January – 31 December)

The deadline for submitting the verified Annual Emissions Reports is 31 March after the scheme year ends, and the deadline for surrendering allowances is 30 April. To ease transition, the Authority will allow a “double-surrender” provision for the 2026 and 2027 scheme years. This means that the surrender deadline for allowances related to the first scheme year will also be 30 April 2028. Operators will still be able to purchase allowances at any point once they have opened an account in the UK Emissions Trading Registry.

Figure 1: Compliance obligations for the 2026 scheme year.

Figure 2: Compliance obligations for the 2027 scheme year.

Expansion to Offshore Ships

The inclusion of offshore ships within the UK ETS will be delayed until 1 January 2027, aligning with the EU ETS timeline to avoid market distortion. Treatment will broadly follow EU ETS, reducing administrative complexity. Further guidance will be provided in the future. 

Compliance Responsibility

The Registered Owner of a ship will be the default responsible entity unless responsibility has been delegated to the ISM Company through a written agreement that cannot be made retrospectively. Where a delegation exists, the ISM Company must provide the Registered Owner’s contact details and complete a declaration of delegated responsibility within the Manage your Emissions Trading Scheme (METS) system.

Each operator will be required to submit one Emissions Monitoring Plan (EMP) and one Annual Emissions Report (AER), rather than separate documents for each ship.

• The EMP must be submitted for approval to the regulator—rather than to an accredited verifier—listing the ships under the operator’s responsibility.
• Operators must appoint an independent verifier accredited by the UK Accreditation Service (UKAS) to verify their AER, which will include the emissions from each ship and aggregated data.
• The issuance of a Document of Compliance (DoC) will not be required under the UK ETS.

The regulator will be assigned based on the location of the operator’s place of residence or registered address. In case operators do not have a registered office or place of residence in the UK, regulatory responsibility will fall to the Environment Agency. The designated regulators are as follows:

• England – Environment Agency
• Northern Ireland – Northern Ireland Environment Agency
• Scotland – Scottish Environment Protection Agency
• Wales – Natural Resources Wales.

Emissions Reductions Claim

Under the UK ETS, maritime operators may submit an Emissions Reduction Claim (ERC) for the CO₂ emissions from the eligible fuel. Following successful claim and verification, a zero-emission factor will be applied to the mass of that fuel, leading to a reduction in the maritime emissions figure.

The ERC is a part of the Annual Emissions Report (AER) process. All fuel consumption using the applicable default emissions factor for each fuel type is to be reported in order to calculate the total maritime emissions figure, before taking account of any ERC. The maritime operator must then provide all required information for each batch, or part-batch, of eligible fuel and submit the relevant ERC, which will be included in the verified AER submitted in METS. The ERC cannot exceed the total fuel use in the scheme year.

The eligible fuel must meet all of the following criteria:

a)    it is included in the list in the Direction on Eligible Fuel.

b)    it was purchased either in the scheme year or no more than three months before the start of the scheme year to which the ERC relates, and;

c)     it was delivered to a point of no return in the scheme year or up to 3 months after the end of the scheme year to which the ERC relates.

d)    it has not been used by the person making the emissions reduction claim. A declaration of no double counting confirming that every batch or part batch in the ERC has not been used to gain a benefit in another scheme or sold to a third party to be provided.

All the documents required to support the ERC must be submitted to facilitate verification, such as proof that the fuel is eligible fuel, proof of purchase etc.

Information to be included in the EMP.

In order to submit an ERC, the EMP should contain the relevant procedure for collecting and recording of the required information, including details of fuel type, purchase, delivery, sustainability criteria and avoidance of double counting.

Allowances and Penalties

The UK ETS maritime regime will follow the principles of the EU ETS, allowing operators to purchase allowances via government auctions or on the secondary market throughout the year in preparation for surrender. To purchase allowances, operators must hold an account in the UK Emissions Trading Registry.

The UK ETS expansion to maritime will mirror existing provisions for installation operators and aircraft operators covered by the scheme, including the application of civil penalties for non-compliance, as follows:

• For each allowance the operator fails to surrender, the excess emissions penalty is £100 multiplied by the inflation factor. In addition to paying the excess emissions penalty, operators must still surrender allowances equal to the emissions figure for surrender.  
• Regulators will publish the names of the shipping companies who are in breach of requirements to surrender sufficient allowances.
• For shipping companies that fail to apply or make revised application for EMP, or to comply with monitoring/reporting requirements, the civil penalty is £20,000. Following the regulator’s initial notice, a further penalty of £500 per day applies from the date on which the notice is given, up to a maximum total of £45,000.

Actions for Compliance

1. Develop an Emissions Monitoring Plan (EMP) in accordance with the UK ETS requirements and submit it for approval to the appropriate regulator. Maritime operators must apply for their EMP within 42 days of commencing the performance of a maritime activity. An EMP could also have been  submitted during the voluntary phase prior to the commencement of the scheme on 1 July 2026; however, that phase has now closed.
2. From 1 July 2026, and from 1 January in subsequent years, start monitoring CO₂, CH₄ and N₂O emissions according to the approved EMP.
3. By 31 January 2027, submit the UK MRV partial emissions report for the period from 1 January to 2 April 2026 via ABS Emissions Reporter Portal (ERP), to allow sufficient time for verification before the 30 April 2027 deadline. For the period from 3 April to 30 June 2026, there are no obligations relating to UK maritime emissions.
4. By 31 March following the end of each scheme year, submit the verified Annual Emissions Report (AER) detailing the emissions for each ship under your responsibility.
5. By 30 April each year, surrender the required number of allowances to cover your verified emissions. For the first two scheme years, 2026 and 2027, the surrender deadline is 30 April 2028 under the double-surrender provision.

Frequently Asked Questions

1.     What emissions will be covered under UK ETS?

The UK ETS will apply to ships of 5,000 GT and above and will cover 100% of carbon dioxide (CO₂), methane (CH₄) and nitrous oxide (N₂O) emissions from the following:

Between UK ports, including those which start and end at the same port, including emissions while at anchor and while moored. Within UK ports, which includes emissions at berth in UK ports and emissions from movements within UK ports, regardless of whether the voyage is domestic or international.

2.     Will offshore ships be covered under UK ETS?

In alignment with the EU ETS, the offshore ships will be included in the UK ETS regime from 1 January 2027.

3.     Should voyages to/from ports in UK Overseas Territories and Crown Dependencies be reported under the UK ETS?

The emissions from voyages between two Crown Dependencies or Overseas Territories or from a port in an Overseas Territory or Crown dependency to a non-UK port should not be included at the 2026 implementation stage. This is subject to ongoing monitoring and review.

4.     Should voyages to/from Port of Akrotiri (CY AKT) and Dhekelia (CY DHK) be reported under UK ETS or EU ETS?

Although geographically located on the island of Cyprus, the Sovereign Base Areas of Akrotiri and Dhekelia are under British sovereignty. As such, they should be treated as the non-EU port, under the scope of the EU MRV/ETS and Fuel EU regimes.

Under UK ETS, they are not considered UK ports, as outlined above. Please refer to the above FAQ for more details.

5.     Should voyages between a UK port and an EU port be reported under both regimes?

No, currently voyages between UK and EEA ports (and vice versa) are not to be recorded under the UK ETS regime. Data on these voyages should continue to be submitted to the European Commission under the EU MRV regime.

Only the emissions generated during UK port stays related to these voyages are to be reported in the UK ETS Emissions Report.

The UK ETS Authority has indicated its intention to expand the scheme to include international voyages from 2028.

6.     Who will be responsible for reporting and surrendering allowances?

The Registered Owner of a ship is the default responsible entity. Under a written agreement, the ISM Company may assume responsibility. Evidence of that agreement must be available on request.

7.     What should be done when there is a change in the ISM Company?

When there is a change to the written agreement with the registered owner that affects compliance with UK ETS, the ISM Company must notify the regulator in writing within 14 days of the change to

the written agreement taking effect.

8.     Will the emission factors for fuels cover the full lifecycle emissions?

The scheme will use a Tank-to-Wake emissions accounting approach for conventional fuels. Sustainable fuels of biological and non-biological origin will be zero-rated.

9.     Should a Document of Compliance (DoC) be carried on board for the purposes of the UK ETS?

No. A Document of Compliance (DoC) is not required under the UK ETS. Compliance is managed by UK ETS regulators through the Manage your Emissions Trading Scheme (METS) system and the UK Emissions Trading Registry.

10.  When can maritime operators start registering with the regulator?

Maritime operators with a registered address or those who are resident in the other UK Nations can contact their relevant regulators through the helpdesk emails listed below.

• Scotland: Scottish Environment Protection Agency - emission.trading@sepa.org.uk.
• Wales: Natural Resources Wales (NRW) - GHGHelp@cyfoethnaturiolcymru.gov.uk.
• Northern Ireland: Northern Ireland Environment Agency (NIEA)- emissions.trading@daera-ni.gov.uk.

11.  Does the monitoring plan need to be approved by a regulator or by the verifier?

Emissions Monitoring Plans (EMPs) will be issued by the UK ETS regulators through METS. A single EMP will be required per operator, not per ship, and it will include a list of the ships for which the operator is responsible. Verifiers will not have any role in approving EMPs under the UK ETS.

The EMP will include:

• Operator details.
• Declaration in relation to any delegated responsibility for UK ETS.
• Details of operator’s activities, including geographical scope and purpose of activity (passengers, cargo and so on).
• List of ships.
• Ship details.
• Fuels, emissions sources and measurement devices.
• Operator level control and management procedures, including in relation to any emissions reduction claims.

There are three ways to complete the EMP application via METS: manual entry, XML upload or API.

12.  Under which conditions can an operator be exempt from ‘per‑voyage’ monitoring?

An operator is not required to carry out per‑voyage monitoring for a ship if the following conditions are met:

1. The ship is scheduled to perform more than 300 voyages while under the responsibility of the maritime operator, and
2. The ship does not make any journeys that fall outside the definition of a “voyage” under the UK ETS regime.

In this case, the operator may monitor the following for the entire scheme year for that ship:

(a) The total number of voyages.
(b) The total amount of each type of fuel consumed.
(c) The emission factor used for each type of fuel consumed, and
(d) The total amount of each greenhouse gas emitted.

13.  Will the UK authorities approve the Annual Emissions Report?

The Annual Emissions Report must be verified by an independent verifier, that is accredited by UKAS for UK ETS. The verified annual emissions report must then be submitted to the regulator through METS by 31 March in the year following the scheme year. Under the UK ETS, only one Annual Emissions Report (AER) per operator is required, rather than one for each ship.

14.  If a voyage started in 2026 but ended in 2027, in which scheme year must its emissions be reported?

Where a voyage commences in one scheme year but ends in another scheme year, the

respective emissions must be accounted for under the scheme year in which they occur.

15.  Are offshore installations considered a port of call?

Offshore installations, assigned with United Nations Code for Trade and Transport Locations (UN/LOCODE), are considered ports of call and shall be reported accordingly.

16.  How can operators obtain UK ETS allowances? 

UK ETS works on the cap-and-trade principle, similar to the EU ETS. A cap is set on the total amount of certain greenhouse gases, which is reduced over time. The cap is divided into allowances, each equivalent to 1 tonne of CO₂ equivalent greenhouse gas (UKAs).

The operators must acquire allowances through auctions run by the Authority or from other participants through secondary markets, throughout the year in preparation for surrender.

17.  What is the official market where UK ETS allowances will be traded?

Both the auction platform and secondary market services under the UK ETS are provided by ICE Futures Europe. Market participants need to be registered with ICE Futures Europe to take part in UKA auctions. To purchase and surrender allowances, operators must hold an account in the UK Emissions Trading Registry.

18.  What is the procedure for opening a Maritime operator holding account (MOHA)?

For operators that have been issued an emissions monitoring plan, the UK Registry Administrator will open the corresponding holding accounts. Access to these accounts has been available since the scheme became operational in July 2026.

19.  Will there be a charge for EMP applications and opening accounts?

From 1 July 2026, the main charges are as follows:

• £2,331.35 for the EMP application: This includes the cost of setting up a MOHA in the UK ETS Registry with one authorized representative with a surrender-only permission.
• £2,828.55 annual subsistence charge: This covers the maintenance of the METS and MOHA account. Following the issue of the EMP, this charge is payable annually in arrears for each scheme year in which the company is a maritime operator.
• A determination charge of £156.74 per hour may also apply where the Environment Agency is required to determine a maritime operator's emissions under article 45A or 45B.

The above figures are those set by the Environment Agency. Charges applicable under the charging schemes of SEPA, NRW and NIEA may differ.

20.  Can charterers purchase UKAs to reimburse the responsible entity?

Yes. Legal persons and individuals can apply for a trading account in the UK ETS Registry, which is used to hold and trade allowances and to participate in UKA auctions (subject to eligibility criteria). Although this type of account cannot be used for UK ETS compliance obligations, it allows charterers to purchase and transfer UKAs.

21.  Will UK MRV be maintained even if UK-ETS MRV starts?

Statutory Instrument 2026 No. 245 The Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) (Revocation) Regulations 2026, has revoked the existing UK MRV scheme. From July 2026, the planned expansion of the UK ETS to the maritime sector introduced a new digital system for data collection, along with updated regulations for monitoring, reporting, and verification of UK maritime emissions.

22.  What are the reporting responsibilities under UK MRV for 2026, for the period from 1 January 2026 to 1 July 2026, when the UK ETS enters into force?

For the period 1 January to 2 April 2026, emissions data must still be monitored and verified in accordance with UK MRV requirements in accordance with MIN 669. However, a UK MRV Report for either 2025 or 2026 is not expected to be submitted to the UK Administration. The deadline for verification of the UK MRV emissions data covering the period 1 January to 2 April 2026 is 30 April 2027.

For the period 3 April to 30 June 2026, no UK maritime emissions monitoring or reporting obligations apply, as the UK ETS had not yet entered into force for maritime emissions and the previous UK MRV reporting framework no longer applied.

From 1 July 2026 onwards, the applicable monitoring, reporting, and verification obligations are those established under the UK ETS according to the approved EMP.

23.   Can an approved EMP be amended, and if so, how can those changes be made?

Yes, under the UK ETS changes to the EMP may be made through the METS platform. Changes fall into 2 categories: significant changes and non-significant changes.

Significant changes are those that materially affect the monitoring or reporting of the emissions, such as the addition of a ship, new fuels or emissions sources or a change in the monitoring method etc. An application for a significant change must be submitted 14 days before the change.

Non-significant changes are those that are not considered significant but could affect how emissions are monitored and reported or affect the ability of the regulator to contact the EMP holder, such as the update of any procedure or removing of a ship. An application for a non-significant change must be submitted by 31 December of the year in which the change occurs. Multiple non-significant changes arising in the same year may be submitted together for efficiency.

These applications are free of charge, and multiple changes may be included in the same variation application, for example addition of a ship and an update of a procedure.

24.   Are there any surrender deductions due to the use of sustainable fuels?

Yes, eligible fuels as included in the relevant direction may qualify for a surrender deduction through an Emissions Reduction Claim (ERC), subject to the applicable criteria. Eligible fuels included in a valid ERC are treated as having an emissions factor of zero. To make an ERC, the EMP must include the relevant procedures for collecting and recording the required supporting information.

The ERC cannot exceed the total fuel use in the relevant scheme year.

25.   Can you still receive the surrender deduction if one of the ERC criteria is not met?

No. If all the ERC criteria are not met, then the appropriate default emissions factors will be applied to the fuels included in the ERC.

26.  Can an ERC be banked?

No, the ERC cannot be carried over to the following scheme year.

27.  What documents are required to be submitted to support the ERC?

The following documents must be submitted to support the ERC, for each batch of eligible fuel claimed:

• proof that the fuel is an eligible fuel;
• proof of purchase;
• proof that the eligible fuel has been delivered to a point of no return;
• the mass of the eligible fuel, or its volume and density so that its mass can be calculated;and
• a declaration of no double counting.