Emergency Contact Rebecca Bax: The EU Emissions Trading System (ETS) - Contractual considerations for owners and operators Home Latest updates News Rebecca Bax: The EU Emissions Trading System (ETS) - Contractual considerations for owners and operators 9 Feb 2024 Download View PDF Sign up for alerts Rebecca Bax Senior Claims Executive - The Shipowners' Club Introduction The Club previously prepared an article on the EU Emissions Trading System (ETS) and the inclusion of the maritime industry in this scheme . With the EU ETS in force as of 1 January 2024 and shipping companies being required to surrender their first ETS allowances by 30 September 2025 for emissions reported in 2024, this article will further set out who is responsible for compliance with the EU ETS, the associated costs , and contractual considerations for both owners and operators. Who is responsible for compliance with the EU ETS? The EU ETS states that the “Shipping Company” is the entity responsible for compliance with the EU ETS. The “Shipping Company” is defined within the EU ETS as “ the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed responsibility for the operation of the ship from the ship owner and that, on assuming such responsibility, has agreed to take over all the duties and responsibilities imposed by the International Management Code for the Safe Operation of Ships and for Pollution Prevention” [1] . It has now been clarified that, by default, the registered shipowner will be considered responsible for compliance with EU ETS obligations. However, the EU ETS does permit an ISM Company to contractually agree to assume responsibility for EU ETS obligations. The ISM Company is a party who has assumed responsibility for the Document of Compliance (DOC) under the ISM Code and would ordinarily be a bareboat charterer or technical manager. The Implementing Regulation [2] , which was published in November 2023, clarified what is r