Positive direction in the European Commission’s review of the EU Emissions Trading System

July 20, 2026

With its review of the EU Emissions Trading System (EU ETS), the European Commission is maintaining the course for shipping’s green transition. This should provide the necessary predictability for an industry that, from Denmark alone, already contributes around DKK 3.8 billion annually through the purchase of emissions allowances and more than EUR 9 billion across the EU as a whole.

Today, the European Commission presented its review of the EU Emissions Trading System, the EU ETS.

Danish Shipping’s initial assessment is largely positive.

“It is positive that the Commission is maintaining a stable framework for the EU ETS. Shipping companies need clear and long-term rules when making substantial investments in the green transition,” said Nina Porst, Executive Director of Sustainable Ships and Skills at Danish Shipping.

The Commission appears to have listened to the industry. Shipping companies have invested billions in vessels capable of operating on green fuels, but today there is no green fuel available to fill their tanks. It is therefore positive that funds from the ETS will now, to a greater extent, be used to support the green transition in areas where there have previously been gaps in the value chain.

Shipping companies need clear and long-term rules when making substantial investments in the green transition

Nina Porst, Executive Director of Sustainable Ships and Skills at Danish Shipping

This is to be achieved through a so-called Sustainable Maritime and Propulsion scheme (SMAP), aimed at narrowing the price gap between fossil fuels and alternative fuels and propulsion technologies, as well as through the targeted use of shipping’s ETS contributions in the Innovation Fund.

“The EU must make greater use of the ETS to accelerate the transition. This includes stronger financial support for sustainable fuels and new technologies, as well as for the full range of energy-efficiency projects capable of delivering immediate emissions reductions from the existing fleet.

“When the industry contributes billions, those funds should also help drive the maritime transition where the need is greatest – both through solutions that reduce emissions here and now and through the technologies and infrastructure needed to scale up the green fuels of the future,” said Nina Porst.

Danish Shipping also welcomes the Commission’s decision to maintain the current geographical scope of the EU ETS. This supports the ambition of achieving global solutions through the UN’s maritime organisation, the IMO.

At the same time, it is important that the Commission intends to adjust the EU rules once a global climate agreement for shipping enters into force, thereby ensuring that shipping companies do not have to pay twice for the same emissions.

Danish Shipping also welcomes the Commission’s proposal for a targeted reduction of the tonnage threshold to 400 GT for selected vessel categories. This will contribute to a more level playing field and increase demand for alternative fuels and propulsion solutions by bringing more vessels within the scope of the system.

Danish Shipping will now examine the proposal in greater detail and looks forward to the forthcoming negotiations on the final design of the review in the autumn.

The Commission’s revised proposal is to be negotiated between the European Parliament and the Council in autumn 2026, with a possible agreement in the first half of 2027 and expected implementation in 2028.

The Commission’s proposal is available here.