UK ETS for Shipping: When Limited Exposure Still Means Significant Compliance Work

For many international shipping companies, UK ETS creates an unusual imbalance: their emissions exposure under the scheme may be relatively limited, but the processes required to manage it are not. 

The numbers illustrate the point. The ICCT estimates that the domestic-only scope leaves around 90% of UK shipping emissions outside UK ETS. And for international voyages that do call at the UK, the Government’s impact assessment estimates average emissions at berth of just under 12 tonnes of CO₂e per port call. At the £87/tCO₂e carbon price assumed in the assessment for 2026, this equates to an allowance cost of around £1,000 for the average port stay. 

Yet companies with UK ETS exposure still need to identify emissions within scope, calculate and manage UK Allowances (UKAs), establish the necessary registry processes, determine responsibility between owners, managers and charterers, allocate costs across contractual periods and reconcile the resulting balances. 

The question for shipping companies is how to incorporate UK ETS without building yet another standalone compliance process around it. 

A familiar framework with a much narrower scope

From a compliance perspective, UK ETS will feel familiar to companies already managing EU ETS. Both schemes put a price on greenhouse gas emissions and require shipping companies to monitor and verify emissions and surrender one allowance for each tonne of CO₂-equivalent emissions covered by the scheme.

UK ETS applies to vessels above 5,000 GT and places responsibility on the registered shipowner, with the possibility of transferring responsibility to the ISM company where the necessary mandate is in place. Offshore vessels are expected to enter the scheme from 2027.

The important differences lie in how the scheme has to be managed. UK ETS uses UK Allowances (UKAs) rather than EU Allowances (EUAs), currently covers domestic UK voyages and emissions at berth in UK ports, and includes voyages between Great Britain and Northern Ireland. It also introduces company-level reporting through Emissions Monitoring Plans rather than replicating the ship-level reporting approach familiar from EU MRV.

These differences mean UK ETS cannot simply be treated as an extension of an existing EU ETS calculation. Companies need to apply a separate geographical scope, distinguish UKA exposure from EUA exposure and account for UK ETS separately in their commercial arrangements and settlement processes.

The regulatory logic may be familiar, but UK ETS still needs to be incorporated as a distinct layer into the compliance processes companies already have in place.

A narrow emissions scope still requires a full compliance process

The relatively narrow scope does not translate into an equally narrow compliance process.

The complexity becomes particularly visible when emissions exposure has to be translated into commercial settlements. Responsibility may change between owners, managers and charterers over the course of a reporting period, meaning UK ETS costs need to be attributed to the correct contractual periods, documented and ultimately reconciled between the relevant parties.

Without an integrated process, this can require teams to export emissions data from verifiers or noon reporting systems, identify UK voyages and port activities, apply UK ETS scope rules separately from EU ETS, calculate and track UKA requirements, allocate costs across contractual periods, prepare invoices and settlement statements and reconcile open balances.

For companies already managing EU ETS and FuelEU Maritime, the issue is therefore not simply the addition of another carbon price. It is the risk of creating another parallel process, with separate calculations, spreadsheets, settlement files and email-based reconciliation, for every new regulatory scheme.

One compliance process instead of another standalone workflow 

For compliance and IT teams, adding another regulation should not mean adding another standalone system. As regulatory requirements multiply, the priority is increasingly to consolidate them within an integrated, all-in-one compliance environment rather than maintain separate tools, datasets and workflows for each scheme. 

This is why OceanScore has integrated UK ETS directly into Compliance Manager. Companies can manage UK ETS alongside EU ETS and FuelEU Maritime using the same verified emissions dataset, commercial logic and settlement workflows. 

Compliance Manager provides a common compliance data foundation across UK ETS, EU ETS and FuelEU Maritime. For UK ETS, companies can calculate UKA exposure by vessel and period, allocate costs according to charter-party periods, generate invoices and statements, monitor open balances and maintain an audit trail for calculations and allocations. 

As carbon regulation expands, having one reliable emissions dataset that can support multiple regulatory schemes becomes increasingly important. 

Preparing for future expansion 

The current UK ETS scope is expected to expand. 

The UK Government has indicated its intention to expand the scheme to include voyages to and from the UK from around 2028. If implemented, this would substantially increase the share of shipping emissions covered by UK ETS and therefore the volume of emissions that companies need to manage under the scheme. 

Importantly, a broader scope would not fundamentally change the processes companies are putting in place today. The same underlying tasks — identifying emissions within scope, calculating UKA requirements, allocating responsibility and settling the resulting costs — would simply need to be applied across a larger emissions base. 

Beyond compliance: building efficient carbon management 

Regardless of the eventual scope and timing of UK ETS expansion, the broader direction is clear: shipping companies are managing an increasing number of overlapping carbon regulations. 

Each new regulation introduces another workflow, another commercial settlement process and another audit trail. Managing every scheme independently quickly becomes inefficient. The organisations best prepared for the future will be those that move beyond managing each regulation in isolation and build operational processes capable of supporting them all. 

As carbon regulation continues to expand, the priority will not be to build a new process for every regulation, but to manage them efficiently through a single, integrated compliance process.