Adding to the challenge, the price of European Union Allowances is highly volatile, with fluctuations that can exceed 15% over just a few weeks. This makes cost forecasting and allowance purchasing a complex, high-stakes task for shipping companies. How can shipowners avoid financial pitfalls while staying competitive?
To explore the impact of the EU ETS on the maritime industry and the strategies shipowners should adopt, we spoke with Frederic Bouthillier, Head of Shipping at Vertis Environmental Finance (STX)—one of the largest ETS traders and market makers.
What should shipowners be most concerned about as they prepare for the September 2025 deadline?
According to Bouthillier, a major consideration should be cost volatility and financial penalties. The EU ETS is structured to make carbon allowances more expensive over time. At the time of writing, prices are already above €73 per metric ton, and in two to three years, we could easily see prices exceed €100.
Shipowners need to buy allowances at the right time—if they wait too long and prices surge, they’ll face significantly higher costs. On the other hand, misreporting emissions can be even worse. Underreporting means paying €100 per missing ton in penalties plus the cost of the missing allowances, which could effectively double their financial burden. Overreporting ties up unnecessary capital in excess credits.
This is why accurate emissions monitoring and a structured approach to allowance purchasing are so critical.
What role does technology play in helping shipowners stay compliant and competitive?
Bouthillier says that precision is everything. Shipowners must monitor their emissions by volume and type to avoid compliance mistakes. Most companies focus on CO₂, but other emissions like N₂O and CH₄ have significantly higher emission factors, meaning mistakes in reporting these gases can have outsized financial consequences.
Real-time emissions monitoring allows shipowners to:
- Avoid overpaying or underpaying for allowances
- Optimize fuel consumption and emissions reduction strategies
- Generate reliable data for independent verification
Having accurate, real-time data isn’t just about compliance—it’s a strategic advantage. Those who integrate technology into their operations can make better decisions, reduce unnecessary costs, and improve overall efficiency.
How can shipowners use compliance as a way to stay competitive?
Shipowners can’t afford to be reactive, Bouthillier says. The EU ETS is designed to push the industry toward lower-emission solutions, and those who adapt early will have a competitive edge.
According to Bouthillier, there are three key strategies shipowners should focus on:
- Smart Allowance Purchasing: Work with market experts to buy at the right time and avoid unnecessary costs. Those who understand price movements will gain a financial advantage.
- Technology-Driven Monitoring: Accurate, real-time emissions tracking helps shipowners avoid penalties, optimize fuel usage, and demonstrate compliance with confidence.
- Exploring Alternative Fuels and Efficiency Technologies: Wind-assisted propulsion, biofuels, and energy efficiency measures can reduce reliance on expensive carbon credits and provide long-term cost savings.
- Invest in real-time emissions monitoring to ensure reporting accuracy
- Develop a structured approach to allowance purchasing to minimize costs
- Explore fuel alternatives and efficiency measures to stay ahead of rising carbon prices
The companies that invest in these strategies now will position themselves ahead of the competition.
What trends should shipowners watch as the EU ETS continues to evolve?
Bouthillier advises shipping companies to keep a close watch on carbon price trends. With demand increasing, the cost of compliance will only go up over time. More sectors are being added to the ETS, which means more competition for allowances and higher prices.
Another trend is the shift toward fuel flexibility and alternative propulsion technologies. Some companies are already experimenting with wind-assisted propulsion, which can help cut fuel use and emissions. Those who invest early in decarbonization technologies will have lower compliance costs and a stronger market position.
Final Takeaways for Shipowners
Bouthillier says his biggest piece of advice for shipowners navigating the EU ETS is to be proactive. If you wait until the deadline to think about compliance, you’ll already be behind.
The companies that take action now—rather than waiting for the market to force their hand—will be the ones that succeed.
Stay Ahead of EU ETS Compliance with TS Cyanergy
With the September 2025 deadline fast approaching, accurate emissions monitoring and strategic planning are more critical than ever. TS Cyanergy’s real-time emissions monitoring technology empowers shipowners to optimize compliance, avoid costly penalties, and gain a competitive edge in an evolving market.
Learn more about how TS Cyanergy can help your fleet stay compliant and cost-efficient: