EU ETS enforcement: penalty, naming, expulsion order

EU ETS enforcement for shipping is the set of sanctions that Article 16 of Directive 2003/87/EC, as amended by Directive (EU) 2023/959, applies to a shipping company that fails its obligations under the EU Emissions Trading System for shipping . It has three levers written into the Directive itself: an excess emissions penalty of EUR 100 per tonne of CO2 equivalent not covered by surrendered allowances, indexed for inflation, with the allowances still owed (Article 16(3), (3a) and (4)); publication of the defaulting company’s name by the Member State (Article 16(2)); and an expulsion order that closes every EU port except those of the flag State to all of the company’s ships after two consecutive years of surrender failure (Article 16(11a)). Each Member State adds its own penalties for every other breach under Article 16(1).

The first maritime surrender date was 30 September 2025, for 40% of verified 2024 emissions. The second was 30 September 2026, for 70% of 2025 emissions, which makes 1 October 2026 the first day on which the two-period condition for an expulsion order can be met.

Enforcement levers and their legal basis

Six provisions enforce the regime against a shipping company: three in Article 16 of the Directive, two in other EU acts on the Registry and on MRV, and one that hands everything else to national law. That last row is why a company’s exposure depends on which Member State administers it.

The excess emissions penalty and the expulsion order are the two sanctions specific to the ETS surrender obligation. Registry blocking and the MRV order apply earlier, on the reporting side, and they can close a company’s account or a ship’s port access before any surrender date arrives.

Article 16 of Directive 2003/87/EC as amended for shipping

Article 16 is the penalties article of the EU ETS Directive, and Directive (EU) 2023/959 extended it to shipping companies by inserting paragraphs 3a and 11a and amending paragraphs 2 and 3. The paragraph numbers matter: the consolidated text of 1 March 2024 labels the expulsion order 16(11a), not 16(11).

Article 16(1) is the general clause and was not amended in 2023. It obliges Member States to “lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive”, and states that the penalties “must be effective, proportionate and dissuasive”. Every penalty for a late monitoring plan, a missing emissions report, refused verifier access or false data rests on this paragraph, through national statute.

Article 16(3) is written for an “operator or aircraft operator”. The one-sentence paragraph 16(3a) carries it across to shipping: “The penalties set out in paragraph 3 shall also apply in respect of shipping companies.” Directive (EU) 2023/959 also moved the reference date in 16(3) from 30 April to 30 September, matching the new surrender date in Article 12(3), which applies to installations, aircraft operators and shipping companies alike.

Article 16(12) empowers the Commission to adopt implementing acts on “the procedures referred to in this Article”. The steps before an order are set nationally, in Germany by TEHG § 47 and in France by Article L229-18-7 of the Code de l’environnement.

The excess emissions penalty under Article 16(3) and 16(3a)

A shipping company that has not surrendered enough allowances by 30 September pays EUR 100 for each tonne of carbon dioxide equivalent emitted for which it has not surrendered allowances, and it must still surrender the missing allowances. The penalty is fixed by the Directive; Member States collect it, but they do not set the rate.

The surrender requirement it is measured against is set by the maritime scope and phase-in rules : 50% of emissions on voyages between an EU port of call and a non-EU port of call, 100% of voyages between EU ports and 100% of emissions at berth, multiplied by the phase-in factor of 40% for 2024 emissions, 70% for 2025 and 100% from 2026. The surrender mechanics explain how allowances move from the company’s account to deletion.

Indexation under Article 16(4)

Article 16(4) provides that the penalty “relating to allowances issued from 1 January 2013 onwards shall increase in accordance with the European index of consumer prices”. The Directive does not publish the resulting figure, and the Commission does not either: COM(2025) 735, the carbon market report of 3 December 2025, says only that “the penalty is indexed for inflation”.

The indexed amount is therefore a national number. Germany’s DEHSt, the emissions trading authority within the Umweltbundesamt, publishes EUR 132.06 per tonne for reporting year 2024 and EUR 135.31 per tonne for reporting year 2025, using 2012 as the reference year under § 46(1) of the Treibhausgas-Emissionshandelsgesetz (TEHG). France indexes on the harmonized index of consumer prices from 1 January 2013 under Article L229-10 II of the Code de l’environnement. The Netherlands raises the amount each year in line with the European consumer price index from calendar year 2013 under Article 18.16e(3) of the Wet milieubeheer.

Different reference years can produce different euro amounts for the same reporting year, so a company administered by France and one administered by Germany need not owe the same rate for an identical shortfall.

The surrender obligation survives payment

Payment of the penalty “shall not release” the company from surrendering an amount of allowances equal to the excess emissions; the allowances are surrendered “when surrendering allowances in relation to the following calendar year”. The penalty is a sanction on top of the obligation, never a buy-out.

Germany sets its own date for the residual surrender: TEHG § 46(3) requires the outstanding allowances by 31 May of the following year. France goes further and freezes the company’s units: under Article L229-10 II they become non-transferable (“incessibles”) until the fine is paid and the allowances surrendered.

Worked example: a German-administered company in the 2026 cycle

The allowance requirement comes from the EUA liability relation below, which applies the 50% extra-EU factor and the phase-in factor to verified emissions.

Take a company administered by Germany whose verified 2025 emissions within the Article 3ga scope, after the 50% weighting of extra-EU voyages, come to 50,000 tonnes of CO2. At the 70% phase-in factor for 2025, the surrender requirement on 30 September 2026 is 35,000 allowances.

The company surrenders 30,000. The shortfall is 5,000 allowances, so the penalty is 5,000 × EUR 135.31 = EUR 676,550 at the DEHSt rate for reporting year 2025. It still owes the 5,000 allowances, due by 31 May 2027 under TEHG § 46(3), and its name is published in the Bundesanzeiger once the assessment is final. The penalty does not depend on the market price of an allowance, so it costs the same whether the EUA price is EUR 60 or EUR 90.

No reduction for proportionality: Billerud Karlsborg

In Case C-203/12 Billerud Karlsborg and Billerud Skärblacka, decided on 17 October 2013, the Court of Justice ruled on two points that bind every shipping company today. Article 16(3) and (4) apply to an operator that fails to surrender on time “even where they hold a sufficient number of allowances on that date”. The amount of the penalty “may not be varied by a national court on the basis of the principle of proportionality”.

The practical lesson for a ship operator is administrative. Allowances sitting in the maritime operator holding account on 30 September do not count until they are surrendered, and a clerical miss is penalized at the full indexed rate.

Understated verified reports: Nordzucker

Case C-148/14 Nordzucker, decided on 29 April 2015, sets the limit of Article 16(3). Where an operator surrendered allowances matching its verified emissions report, and the emissions are later found to have been understated, the excess emissions penalty does not apply. The Member State’s own penalties under Article 16(1) apply instead.

For shipping, the case separates two failures that look alike. Surrendering short of a correct verified report is an Article 16(3) case at EUR 100 indexed per tonne. Surrendering exactly against a report that a verifier accepted but that later proves wrong is a national-penalty case, which the verification regime is designed to prevent.

Who the shipping company is

The penalty falls on the shipping company as defined in Article 3(w) of the Directive: “the shipowner or any other organisation or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner and that, on assuming such responsibility, has agreed to take over all the duties and responsibilities imposed by the International Management Code for the Safe Operation of Ships and for Pollution Prevention”. The definition is anchored to the ISM Code company, not to the registered owner or the commercial operator.

A bareboat charterer that holds the Document of Compliance under the ISM Code is commonly the shipping company. Implementing Regulation (EU) 2023/2599 adds a condition where a manager or bareboat charterer holding ISM responsibility has also taken on the ETS obligations: it must be “duly mandated by the shipowner”, evidenced by a document signed by both and supplied to the administering authority.

A time charterer is not, as time charterer, the shipping company. Article 3gc instead requires Member States to ensure that the shipping company is entitled to reimbursement of allowance costs from the entity ultimately responsible for buying the fuel or operating the ship; the Article 3gc cost pass-through is a civil claim, not a transfer of the regulatory duty.

Administering authority under Article 3gf

Each shipping company is supervised by one administering authority, fixed by Article 3gf(1) of the Directive. A company registered in a Member State is administered by that State. A company not registered in a Member State goes to the State “with the greatest estimated number of port calls from voyages performed by that shipping company in the preceding four monitoring years and falling within the scope set out in Article 3ga”. A company with no in-scope voyage in the preceding four years goes to the State where one of its ships started or ended its first voyage within scope.

The Commission publishes the list under Article 3gf(2): Implementing Decision (EU) 2024/411 of 30 January 2024 set the first one, and Implementing Decision (EU) 2025/2452 of 5 December 2025 replaced its Annex from 1 January 2026. The list is revised every two years, not annually. Under Implementing Regulation (EU) 2023/2599 Article 3, the country of registration is the one recorded in THETIS-MRV , and port-call counts come from SafeSeaNet.

The attribution decides which national statute applies to everything outside Article 16(3): the penalty for a missing report, the procedure, the court that hears an appeal and the place of publication. The administering authority attribution rules are therefore the first thing to check when a non-EU company asks what its penalty exposure is.

Reporting failures before the surrender date

A company can lose control of its allowances months before 30 September. The reporting chain under Regulation (EU) 2015/757, the EU MRV Regulation , as amended by Regulation (EU) 2023/957, sets the dates that trigger the earlier sanctions:

1. 31 March: verified emissions reports per ship and aggregated company-level data are due to the administering authority (MRV Article 11(1)). The authority may require them earlier, but not earlier than 28 February.
2. 1 April: the Union Registry blocks the account of any company whose verified emissions for the preceding year are not marked as verified (Delegated Regulation (EU) 2019/1122 Article 32, as replaced by Delegated Regulation (EU) 2023/2904).
3. 30 June: the MRV document of compliance must be on board (MRV Article 18), and the Commission publishes the reported emissions (MRV Article 21(1)).
4. 30 September: surrender (Directive Article 12(3)).

Where verified emissions are missing, Article 31(6) of the Registry Regulation lets the competent authority enter corrected or estimated emissions. Germany’s TEHG § 46(2) provides for an estimate as the basis of the payment obligation where no proper report has been filed, and § 46(1) limits the penalty to the shortfall against verified emissions where a report was filed. A company that never reports does not escape the surrender requirement; it is assessed on an estimate.

Verification itself runs under Chapter III of the MRV Regulation, which Article 3ge of the Directive applies to the ETS. Maritime verifiers are accredited by a national accreditation body under Regulation (EC) No 765/2008 (MRV Article 16(1) as replaced). Implementing Regulation (EU) 2018/2067, which governs verification for installations and aircraft operators, is not the maritime verification act. COM(2025) 735 records 22 accredited maritime verifiers for the first cycle and no suspensions.

The maritime operator holding account

Delegated Regulation (EU) 2023/2904 inserted Article 15a into the Registry Regulation. A shipping company must request its maritime operator holding account within 40 working days of the Article 3gf(2) list, or within 65 working days after its first voyage within scope, and “each shipping company shall have no more than one maritime operator holding account”. The national administrator opens the account within 20 working days, extended to 40 for requests made in 2024. The Commission’s maritime FAQ states that the account should always be in the name of the shipping company.

Article 28(1), as amended, also allows a competent authority or a law enforcement authority to instruct that an account be given blocked status where access has been suspended. Germany links this directly to reporting: TEHG § 45 blocks the account for a missing report.

Name publication under Article 16(2)

Article 16(2) requires that “Member States shall ensure the publication of the names of operators, aircraft operators and shipping companies that are in breach of requirements to surrender sufficient allowances”. Publication is national; the Commission does not keep an EU list of defaulting shipping companies, and the Directive sets no format, timing or retention period.

The German, Dutch and French statutes publish at different points:

• Germany: TEHG § 46(4) publishes the name in the Bundesanzeiger after a final penalty assessment (“bestandskräftigen Festsetzungsbescheid”).
• Netherlands: Article 18.16p of the Wet milieubeheer requires an annual overview, published in the Staatscourant before 1 October, of offenders whose fines have become irrevocable.
• France: Article L229-10 II publishes the name once the decision is final.

All three publish only once the decision is final, so the timing of publication follows the national appeal procedure.

The expulsion order under Article 16(11a)

The EU ETS expulsion order is the only EU ETS sanction that stops ships trading, and it is aimed at the company rather than the ship. The core of Article 16(11a) reads:

In the case of a shipping company that has failed to comply with the surrender obligations for two or more consecutive reporting periods, and where other enforcement measures have failed to ensure compliance, the competent authority of the Member State of the port of entry may, after giving the opportunity to the shipping company concerned to submit its observations, issue an expulsion order, which shall be notified to the Commission, the European Maritime Safety Agency (EMSA), the other Member States and the flag State concerned.

Trigger: two consecutive periods and failed enforcement

Three conditions must all hold. The surrender failure must cover two or more consecutive reporting periods; for shipping the first two were 2024 (surrender by 30 September 2025) and 2025 (surrender by 30 September 2026). Other enforcement measures must have failed; the Directive does not define them, and France makes a prior penalty under Article L229-10 II an express condition. The company must have had the chance to submit observations.

The order is discretionary (“may issue”). National statutes add their own conditions. TEHG § 47 refers to at least two consecutive calendar years (“mindestens zwei aufeinanderfolgende Kalenderjahre”) rather than reporting periods. France’s Article L229-18-7, in force from 24 April 2024, requires two consecutive years and a prior penalty under Article L229-10 II, imposed in France or in another Member State. Whether a late surrender of the first year’s shortfall stops the count is not settled by any of these texts.

Effect on every Member State and on the flag State

Once an order is issued and notified, including to the European Maritime Safety Agency , every Member State “with the exception of the Member State whose flag the ship is flying, shall refuse entry of the ships under the responsibility of the shipping company concerned into any of its ports until the shipping company fulfils its surrender obligations”. Three features follow from the wording:

• It is EU-wide: one port State’s order binds all the others.
• It is company-wide: every ship “under the responsibility of” the company is excluded, not only the ship whose emissions created the shortfall.
• It does not reach the flag Member State’s ports. That State detains the ship instead, and once it issues a flag State detention order, every Member State takes the same measures.

The paragraph closes with a saving: it applies “without prejudice to international maritime rules applicable in the case of ships in distress”. A ship under the order that is in distress therefore falls under those rules, including the place of refuge regime, rather than under the refusal of entry.

Germany names the agencies. DEHSt is the competent authority under TEHG § 11(1) no. 4, and BG Verkehr, the German flag administration, gives enforcement support for § 47 orders and for MRV Article 20(3) orders. France splits the measure by flag in Article L229-18-7: detention for a French-flagged ship, a “décision d’expulsion” for any other flag.

Lifting the order

The order lasts “until the shipping company fulfils its surrender obligations”. Paying the penalty is not enough, and neither is surrendering for the current year alone; the company must clear the outstanding surrender under Article 12, including the allowances carried over from the defaulted years. France’s Article L229-18-7 lifts the measure when the company proves full compliance with its surrender obligations.

Nothing in the Directive provides a fixed lifting period, a de-listing register or an EU-level review body. Those steps sit with the issuing Member State.

The MRV and FuelEU expulsion orders

EU shipping law now has three expulsion orders, and they are often confused. Each rests on a different instrument, targets a different failure and attaches to a different object.

A company that stops reporting for its ships can therefore face ship-level exclusions under the MRV expulsion order before any ETS order is possible. The FuelEU expulsion order and the FuelEU penalty run alongside the ETS, and the double compliance problem means one company can be exposed under all three.

Relationship to UNCLOS and port State control

Article 25(2) of the UN Convention on the Law of the Sea (UNCLOS) lets a coastal State, for ships proceeding to its internal waters or a port facility, “take the necessary steps to prevent any breach of the conditions to which admission of those ships to internal waters or such a call is subject”. Article 211(3) requires that port-entry requirements for preventing pollution be given “due publicity”. The distress saving in Article 16(11a) leaves the international rules on ships in distress untouched.

The ETS order is not a port State control measure. It is issued by the competent authority of the Member State of the port of entry under the ETS Directive, not by a PSC officer under the Paris MoU , and it is separate from a PSC refusal of access . The two can coincide on one ship, but neither depends on the other.

National penalty regimes

Article 16(1) leaves every penalty other than the excess emissions penalty to national law, and the German, Dutch and French statutes differ in amount, authority and procedure. A company’s exposure is set by its administering authority’s statute.

Germany

Germany’s TEHG treats a missing or late maritime emissions report under MRV Article 11(1), or missing aggregated company data under Article 11a(2), as an administrative offence with a fine of up to EUR 100,000 under § 49(4) read with § 49(7). Failures on the monitoring plan, and refusing access or information, carry the same ceiling under § 49(3) nos. 2 and 4. The EUR 500,000 ceiling in the same section applies only to the offences in § 49(1), which do not include the maritime report.

The penalty under § 46(1) is limited to the shortfall against verified emissions where a report was filed, and DEHSt may waive it for force majeure. That is a national allowance. Billerud bars a court from reducing the amount for proportionality, and force majeure is a distinct ground.

Netherlands

The NEa administers 402 shipping companies, according to its news release of 5 November 2025. Article 16.39t(2) of the Wet milieubeheer requires surrender before 1 October, and Article 18.16a(2) makes the fine for missing it mandatory, disapplying Article 5:41 of the General Administrative Law Act (Algemene wet bestuursrecht), which would otherwise bar a fine where the offender cannot be blamed. A company cannot plead absence of fault against the surrender fine in the Netherlands.

Other ETS breaches carry a discretionary fine of up to EUR 450,000 per infringement, or up to 10% of annual turnover where turnover exceeds EUR 4,500,000.

France

France’s Article L229-10 II, in force from 1 January 2025 as amended by Law 2024-450, opens with a formal notice (mise en demeure) giving the company one month to submit written or oral observations. The penalty is EUR 100 per missing quota, indexed on the harmonized index of consumer prices since 1 January 2013. The company’s units cannot be transferred until the fine is paid and the allowances surrendered, and its name is published once the decision is final.

Article L229-18-7, inserted by Law 2024-364 and in force from 24 April 2024, transposes the expulsion order with two French-specific features: a prior penalty is a precondition, and a French-flagged ship is detained rather than expelled.

Procedure and appeals

There is no EU-level procedure for a maritime ETS penalty and no EU-level appeal. The procedure is that of the administering Member State’s administrative law, and the appeal runs to its national courts. What the EU sets is the substance: the penalty amount, the publication duty and the expulsion conditions.

Two procedural guarantees are written into the texts: Article 16(11a) requires that the company be given the opportunity to submit observations before an expulsion order, and France’s L229-10 II opens every penalty case with a formal notice and one month for observations. In Germany, an action against a DEHSt decision goes to the Verwaltungsgericht at the authority’s seat (TEHG § 11(2)).

The Court of Justice enters through preliminary references. Billerud Karlsborg and Nordzucker were both preliminary rulings answering questions from national courts, and both narrowed what a national court can do with the excess emissions penalty: it cannot reduce the amount (Billerud), and it cannot impose it on an operator that surrendered against its verified report (Nordzucker).

The stationary-sector record shows what enforcement looks like in practice. SWD(2025) 388, the staff working document accompanying the 2025 carbon market report, lists excess emissions penalties for 31 installations in 9 countries and 11 aircraft operators in 6 countries for the cycle it covers, with no maritime row because the first maritime surrender had not yet fallen due.

Criminal law and Directive (EU) 2024/1203

The Environmental Crime Directive , Directive (EU) 2024/1203 on the protection of the environment through criminal law, does not make any EU ETS breach a crime. Its list of offences in Article 3(2), points (a) to (t), contains no ETS offence, and it does not refer to Directive 2003/87/EC.

The Directive was adopted on 11 April 2024 and published in the Official Journal on 30 April 2024. Member States must transpose it by 21 May 2026 (Article 28(1)). It replaces Directive 2008/99/EC and Directive 2009/123/EC for the Member States bound by it (Article 26), and Denmark and Ireland are not bound (recitals 69 and 70). Point (a) of Article 3(2) covers emissions into air that cause or are likely to cause death, serious injury or substantial damage; reading it to cover falsified emissions reporting is not supported by the text.

Criminal exposure for falsifying maritime ETS or MRV data therefore comes from national law: the Article 16(1) penalties and each Member State’s general offences of fraud and forgery. For installations, SWD(2025) 388 records that imprisonment was available in Belgium, Cyprus, Denmark, Estonia, Ireland, Luxembourg, Norway and Sweden.

First compliance year: 2024 emissions, surrendered by 30 September 2025

The first maritime cycle closed with surrender above 99% of requirements by allowances, and 13% of companies non-compliant by count. COM(2025) 735 of 3 December 2025 gives the allowance-side figures:

• 89.8 million tonnes of verified 2024 maritime CO2 in the Union Registry (figure of 15 October 2025);
• a surrender requirement of 35.6 million allowances after the 40% phase-in and deductions;
• 54,243,768 allowances cancelled for 2024, the difference created by the phase-in;
• 3,313 shipping companies filing company-level reports, covering 13,627 ships and 138.3 million tonnes of CO2 within MRV scope;
• surrender “for more than 99% of surrendering requirements” on Registry figures of 1 October 2025;
• 0.5 million tonnes of ice-class deduction, which the report calls voluntary.

The company count is lower. The Dutch Emissions Authority (NEa) reported on 5 November 2025 that 87% of shipping companies EU-wide were fully compliant and 494 companies, 13%, were not; of the 402 companies it administers, 93% were fully compliant. Both figures are correct: one measures allowances and the other companies, so a shortfall spread across many small companies moves the company count far more than the allowance total.

Those 494 companies are the population from which the first expulsion orders could come. No order was legally possible before the second consecutive surrender date of 30 September 2026, and none has been published.

P&I cover for ETS penalties

An EU ETS excess emissions penalty is not a fine that P&I covers as of right under the Gard rules. How the clubs structure P&I fines cover varies by rule book; Gard’s Rule 47 is the text stated here. Gard Rule 47.1 covers fines in three categories only:

1. short or over-delivery of cargo and failure to comply with cargo declaration rules;
2. breach of immigration law;
3. accidental escape or discharge of oil or any other substance.

Rule 47.2 lets the board, “in its sole discretion”, cover other fines where the member took reasonable steps to avoid the event, and Rule 47.3 frees the board from giving reasons. The Gard rule page carries no edition year. A surrender failure is an administrative default by the shipping company, not an escape of a substance, so it falls outside 47.1 and depends on 47.2. A company whose shortfall stems from failing to buy allowances is unlikely to show the reasonable steps 47.2 asks for.

The rules of other clubs in the International Group of P&I Clubs need to be read individually; this article states only the Gard text. Third-party liabilities that follow from an expulsion, such as cargo claims, are a separate question from cover for the penalty itself.

Charter-party allocation of an ETS default

The Directive puts the penalty on the shipping company and nowhere else, so allocation to a charterer is contractual. Two mechanisms carry it.

The statutory one is Article 3gc, which requires Member States to give the shipping company a right to reimbursement of allowance costs from the entity ultimately responsible for buying the fuel or operating the ship. It concerns the cost of allowances, not the penalty for failing to surrender them.

The contractual one is the BIMCO ETS Allowances Clause for Time Charter Parties 2022 , published by BIMCO . Under clause (c)(i) the charterers “shall provide and pay for the Emission Allowances corresponding to the Vessel’s emissions” during the charter. The owners notify the quantity “within the first seven (7) days of each month” for the previous month, and the charterers transfer the allowances into the owners’ nominated account within seven days of notification. If the charterers fail, clause (d) lets the owners suspend performance on “five (5) days’ notice” while the vessel remains on hire.

The clause is a monthly allowance-transfer mechanism. It contains no cash alternative, no price reference and no indemnity for an Article 16 penalty. An owner that ends up short on 30 September because a charterer did not transfer has a breach-of-contract claim for the allowances and any proven loss, and the regulatory penalty stays with the owner as shipping company.

For a time charter the practical control is timing. Monthly transfers mean a shortfall shows within weeks, well before 30 September, and the suspension right in clause (d) is the lever to use before the surrender date rather than after it. Under a voyage charter or a contract of affreightment the owner buys the fuel, and the cost is recovered through freight; in the liner trades it is recovered through a carrier emissions surcharge .

Cargo, charter and finance consequences of an expulsion

An expulsion order is a public-law bar on entry, and its private-law consequences fall on contracts that never contemplated it. Because no order has yet been issued, none of these consequences has been tested in a reported case.

Bills of lading. A laden ship that cannot enter the named EU discharge port must discharge elsewhere or wait. Whether the carrier answers for that under a bill of lading governed by the Hague-Visby Rules turns on the Rules’ exceptions, any liberty clause in the bill and the deviation analysis of the governing law, applied to a refusal that results from the shipping company’s own surrender failure.

Time charters. Where the owner is the shipping company and its ships are excluded, the charterer loses EU trading. Whether that puts the ship off hire depends on the off-hire clause, and whether the charter is frustrated depends on the governing law’s treatment of an event caused by one party’s own default.

Finance. A ship mortgage facility with a compliance-with-laws covenant, where it has one, will be engaged by an order that bars the vessel from EU ports, and the lender’s view of earnings will follow the asset valuation consequences of a ship that cannot trade to Europe.

Cargo insurance. Cargo interests turn to their cargo insurance for physical loss or damage arising from a diversion or transhipment, and to the carrier for the rest.

Compliance calendar

A shipping company meets four dated obligations each year, and each missed date has its own sanction.

The phase-in factors that set the 30 September requirement are 40% for 2024 emissions, 70% for 2025 and 100% from 2026, when methane and nitrous oxide also enter the scope. Offshore ships of 5,000 GT and above surrender from their 2027 emissions.

Pending changes

No adopted amendment to Article 16 is pending; two measures in progress change the context around it. The Commission’s proposal COM(2026) 616 of 17 July 2026 would extend the outermost-region, public-service link, island and ice-class derogations to 31 December 2035, revise the transhipment-port rules and amend Article 3gg to address double payment. It is a proposal under procedure 2026/0212(COD) and has not been adopted; the 2026 review proposal page tracks its content.

At the IMO, the Net-Zero Framework was approved at MEPC 83 in April 2025 but not adopted; the extraordinary session that was to adopt it adjourned in October 2025. Article 3gg(1) of the Directive, which requires a Commission report if the IMO adopts a global market-based measure, has not been triggered.

Limitations

This article covers three national statutes: Germany, the Netherlands and France. It does not state the penalty regimes of Italy, Spain, Greece, Malta, Cyprus, Denmark or the other administering States, and a company administered by one of them must read that State’s transposing law. It does not cover the Dutch transposition of the expulsion order.

The indexed penalty figures are the German ones published by DEHSt; other States compute their own on their own base year. No EU-level figure exists.

P&I cover is stated from the Gard rules only. No expulsion order had been issued by 2 October 2026, so the procedure, the meaning of “other enforcement measures” and the private-law consequences of an order are untested. The compliance figures stated are those of the first cycle, for 2024 emissions.

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