Emission Trading System (ETS)
D6. Decarbonization, emissions and alternative fuelsDefinition
Cap-and-trade system for greenhouse gas emissions.
An emission trading system caps total greenhouse-gas emissions from covered entities and lets them trade allowances, so the market sets a carbon price while the cap guarantees the environmental outcome. The EU ETS began phasing in shipping from 2024, requiring owners to surrender allowances for a rising share of voyage emissions to and from EU ports. The UK ETS is considering maritime inclusion. ETS pricing complements intensity standards like FuelEU Maritime that regulate the fuel mix directly.