1 East Port Said and Tangiers Med – Implementing Regulation (EU) 2023/2297 GUIDANCE FROM BRITANNIA P&I CLUB / JUNE 2025 This guidance is part of our comprehensive Maritime Emissions Regulations section written in consultation with the law firm HFW. This publication was written in consultation with Alessio Sbraga, Partner and Alex Andreou, Senior Associate, from leading global law firm HFW. Whilst care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice. The definitions for technical terms used can be found in the glossary on page 8. REGULATORY OVERVIEW OF EU EMISSIONS TRADING SYSTEM (EU ETS) 1. Since 2018, ships calling at European Economic Area (EEA) ports have monitored, reported and verified their Greenhouse Gas (GHG) emissions according to the Monitoring, Reporting and Verification (Regulation (EU) No 2015/757) (MRV Regulation), which has applied to CO2 emissions from 2018 and N2O and CH4 from 2024. 1.1 MRV obligations are complemented by a market-based emissions regulation – the EU mandatory cap and trade system (EU ETS) (Directive 2003/87/EC), which is supplemented by various Implementing Acts and Regulation (EU) No 389/2013 (Registry Regulation). The EU ETS came into operation in 2005 but has only applied to maritime sector emissions verified in accordance with the MRV since 1 January 2024. 1.2 In short, under EU ETS, each compliance entity (shipping company) must surrender EU emission allowances (EUAs) corresponding to the verified emissions for ships in its fleet on an annual basis. KEY OBLIGATIONS 1.3 A shipping company must monitor a ship's emissions for a full calendar year (reporting period) in accordance with a monitoring plan (assessed by an accredited verifier) which has been submitted to the applicable EU Member State Authority. 1.4 In the calendar year following a reporting period, emissions are verified (verification period). A shipping company is obliged to prepare an emissions report (corresponding to the emissions generated by ships under its responsibility during the previous reporting period) by 31 January and this is verified by an accredited verifier by 31 March. A shipping company must surrender EUAs corresponding to verified emissions by 30 September. This process repeats on an annual basis. SCOPE OF THE APPLICATION 1.5 EU ETS applies to emissions from ships over 5,000 gt that transport cargo or passengers, on voyages with a touchpoint in the EEA, and the obligation to surrender EUAs covers: (a) 100% of emissions on voyages between EEA 'ports of call'; (b) 50% of emissions on voyages between an EEA 'port of call' and a third country port; and (c) 100% of emissions during EEA 'ports of call'. © Britannia P&I Club 2025 REGULATORY OVERVIEW OF EUROPEAN UNION EMISSIONS TRADING SYSTEM – EU ETS ( ) 1.6 There are a few concepts to clarify here: (a) Voyages are movements of a ship between ports of call. Certain kinds of voyages are exempt voyages (e.g. voyages to an outermost region from the same member state). (b) 'Port of call' is defined as a port where the ship undertakes cargo operations or embarks/disembarks passengers. The definition excludes certain stops - such as for refuelling/obtaining suppliers, distress calls, and ship-to-ship transfers outside ports. (c) Linked to this, containership port calls at designated 'neighbouring container transhipment ports' 1 are also excluded. This mean