With maritime transport now included in the UK Emissions Trading Scheme, ship managers need to understand how the new requirements sit alongside the EU ETS, what this means for SHIPMAN agreements and where potential debt and liability exposures may arise.
Since 1st July 2026, maritime transport has been included in the UK Emissions Trading Scheme (UK ETS). Ship managers must now deal with a second emissions trading scheme to consider alongside the European Union Emissions Trading System (EU ETS). The schemes use separate allowances and have different geographical scopes, but the work involved will be familiar to managers already dealing with the EU ETS.
Both schemes require emissions to be monitored, reported and verified, followed by the surrender of allowances. The EU ETS covers voyages between EU and EEA ports, part of voyages between EU and non-EU ports, and emissions in EU ports. The UK ETS initially covers domestic UK voyages and emissions in UK ports. Managers will therefore need to identify the emissions falling under each scheme and ensure the correct allowances are surrendered.
Does this mean SHIPMAN must be amended again?
In most cases, no. The BIMCO ETS clause in SHIPMAN 2024 was not drafted solely for the EU ETS. An Emission Scheme is defined to include the EU ETS and any similar system imposed by an applicable lawful authority. The wording allows the clause to apply to similar schemes introduced elsewhere, including in the UK, the US or China.
Where the BIMCO clause has been used without amendments which narrow its scope, the UK ETS should already be covered. Managers should, however, check any bespoke wording. A clause which refers only to the EU ETS or EU Allowances may not extend to the UK scheme.
For managers, a more immediate concern may be whether the owner provides the allowances. Where the manager is the responsible entity under SHIPMAN, the owner must provide the allowances needed for compliance. If the owner fails to transfer them, or the manager purchases allowances and is not reimbursed, a substantial debt may arise.
ITIC’s new ship managers’ debt collection cover is relevant in this situation. ITIC can fund approved costs incurred in pursuing unpaid management fees and debts relating to emissions liabilities, including EU ETS and FuelEU liabilities. The cover does not insure the credit risk or pay the cost of the allowances. It covers the costs of recovering money due to the manager. In many cases, an initial approach from ITIC may be sufficient to obtain payment. Where it is not, further recovery action can be considered, such as the appointment of lawyers.
A manager may also face a claim arising from an error in carrying out its responsibilities. For example, the manager could submit inaccurate emissions data, allocate emissions to the wrong scheme, fail to report within the required period or surrender the incorrect number of allowances. If an error causes the owner a loss and results in a claim against the manager, ITIC’s professional indemnity cover may respond, subject to terms and conditions of the cover.
The distinction between these two exposures is clear. If the owner has failed to pay an amount due, it is a debt recovery issue. If the manager has made an error which causes a loss, it may result in a professional indemnity claim.
For managers using the BIMCO ETS clause in SHIPMAN 2024, the arrival of the UK ETS should not in itself mean revisiting the contract. The priority is to check that the clause has not been narrowed through bespoke amendments and that responsibility for providing allowances and reimbursing costs is clear. If the owner does not pay, ITIC may be able to assist with the cost of recovery.