REGULATION news
2026, the total quantity of allowances will be increased to reflect the inclusion of non-CO₂ greenhouse gas emissions from maritime transport. These additional allowances will be auctioned in 2026 and allocated to the Innovation Fund via an updated auction calendar.
Adjustments to the EU ETS Cap in 2026
The report also outlines key adjustments to the EU ETS cap effective from 2026, driven by:
- A planned rebasing of the cap - The expanded scope to cover additional maritime GHG emissions
- An updated list of small emitters excluded from the system
The EU ETS cap defines the maximum total emissions permitted within a trading phase and corresponds to the total number of allowances issued, with one allowance equal to one tonne of CO₂ equivalent (CO₂e). The cap declines annually, ensuring alignment with the EU’s long- term emissions reduction targets and providing market certainty on allowance scarcity.
In 2026, the cap will be: - Reduced by 27 million allowances in line with the 2030 target; and
- Increased to reflect the inclusion of CH₄ and N₂O emissions from maritime transport.
In total, 1,185,420,090 allowances will be issued in 2026 for electricity and heat generation, industrial production and maritime transport, alongside 24,903,076 allowances for aviation.
What the EU ETS Extension means for
maritime transport The extension of the EU ETS to maritime transport builds on existing ETS rules and the Maritime Monitoring, Reporting and Verification (MRV) Regulation. During 2024 and 2025, only CO₂ emissions were covered, with CH₄ and N₂O included from 2026.
Shipping companies reported 89.8 million tonnes of verified CO₂ emissions in 2024. The surrender obligation is phased in, requiring:
- Surrender in 2025 for 40% of 2024 emissions - Surrender in 2026 for 70% of 2025 emissions, with additional reductions for ice-class vessels
Review of the maritime EU ETS The European Commission will conduct a review of the EU ETS for maritime transport in 2026. This review will assess:
- A potential extension of the system to ships below 5,000 GT, but not below 400 GT; and
- Relevant developments at the International Maritime Organization (IMO).
THE REPORT | MAR 2026 | ISSUE 115 | 57
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