Shipowners demand triple carbon allowance pool, cite €30bn need

European shipowners are demanding a threefold increase in the carbon allowances earmarked for shipping's energy transition — from 110 million to at least 330 million — putting the price of a credible green-fuel bridge at roughly €30bn ($33.6bn).

The figure comes from a study published by the European Community Shipowners' Associations (ECSA) and takes aim at the European Commission's proposed Sustainable Maritime Alternative Propulsion (SMAP) mechanism. ECSA estimates that SMAP, as drafted, would cover only about one-third of what the industry actually needs between 2028 and 2040.

The claim rests on a striking asymmetry. Maritime transport accounts for approximately 10% of the emissions covered by the EU Emissions Trading System, yet purchases almost 20% of the allowances auctioned. Unlike several industrial sectors, shipping has received no free allowances since it joined the system in 2024.

That imbalance is the commercial core of the argument, and it is worth spelling out in cash terms.

What does shipping actually pay into the ETS?

ECSA estimates shipowners purchase roughly 90 million allowances annually. At an illustrative carbon price of €100 per allowance, that works out to about €9bn ($10.1bn) a year — equivalent to roughly a quarter of the €30bn the association says the entire transition support pool should contain.

One caveat belongs here, and ECSA itself flags it: the €9bn figure is a modelling assumption, not a fixed annual payment. Allowance prices move, and so does the volume of emissions falling within ETS scope.

The compliance burden is nonetheless set to step up. The phase-in period is complete, and from the 2026 emissions year shipping companies must surrender allowances covering 100% of their emissions within the ETS framework.

What would the SMAP mechanism do?

Under the Commission's proposal, the mechanism would support companies using eligible lower-emission fuels and propulsion technologies by allocating allowances to offset part of their additional costs. The reserve period runs from 2028 to 2040.

ECSA's complaint is arithmetic, not ideological: 110 million allowances against an estimated need of 330 million. The association also wants eligibility widened beyond alternative fuels and propulsion systems to include energy-efficiency investments — a category many operators see as the fastest route to near-term compliance savings.

ECSA Secretary General Sotiris Raptis called on European lawmakers to expand the proposed reserve to provide greater certainty for investment in cleaner shipping technologies.

What is not yet decided

Nothing in the proposal is settled. It forms part of the ongoing revision of the EU ETS and remains subject to approval by both the European Parliament and the Council. The 330 million-allowance ask is an industry estimate, produced by the industry's own association, and will face scrutiny against competing claims from other ETS sectors — several of which have their own free-allocation grievances.

For carriers and forwarders, the stakes are concrete. Shipowners are weighing rising carbon compliance costs against the substantial premiums attached to alternative fuels, fleet upgrades and new propulsion systems. If SMAP stays at 110 million allowances, a larger share of that premium lands on operators' balance sheets — and, in time, on freight rates. If it triples, the ETS pot available to other sectors shrinks accordingly.

The Parliament and Council will settle the question, but not before shipowners' 100% compliance obligation bites on the 2026 emissions year.