Regulatory Patchwork Threatens Maritime Decarbonization

The rapid expansion of regional emissions trading schemes is intensifying compliance demands on the maritime sector, threatening to divert resources and momentum away from practical decarbonisation efforts. With overlapping schemes now in effect or emerging—including EU ETS, FuelEU Maritime, the IMO's postponed Net-Zero Framework, and proposed Greenhouse Gas Fuel Intensity (GFI) measures—shipowners are navigating a patchwork of obligations.

The Fragmentation Problem

"Carbon compliance is becoming more fragmented by the month," said John Cooper, CEO of naval architect BAR Technologies, which called for a single, global framework for greenhouse gas and emissions regulation. "Instead of building momentum behind a single global framework, we're creating a patchwork of schemes with different baselines, rules and cost mechanisms. That creates confusion, inflates costs, and weakens the industry's ability to invest in real, scalable solutions."

According to the International Carbon Action Partnership (ICAP), over 30 emissions trading systems are now either in force or under development worldwide. This pattern of fragmentation reflects a broader global challenge: recent research from the Grantham Research Institute at the London School of Economics identified over 900 climate adaptation laws and policies adopted across 35 countries since the Paris Agreement.

CBAM Adds Complexity

The situation is further complicated by the EU's Carbon Border Adjustment Mechanism (CBAM), which went live on January 1, 2026. While not directly taxing shipping emissions, CBAM introduces indirect carbon costs into the trade system by pricing the embedded emissions of goods such as steel, aluminium, cement and fertilisers—all major seaborne cargoes.

"CBAM is an example of how carbon pricing is now embedded into trade," Cooper noted. "But it's also a reminder that without multilateral alignment, we risk policy friction and commercial uncertainty on a global scale."

UK ETS Joins the Fray

The UK shipping industry has raised serious concerns over government plans to extend the UK Emissions Trading Scheme (UK ETS) to domestic maritime from July 1, 2026, warning that the policy risks harming UK competitiveness, increasing costs for island communities, and slowing progress towards net zero.

"The sector supports the UK's climate goals, but cannot deliver meaningful emissions reduction without the necessary fuels, infrastructure, and clear guidance in place," said a spokesperson for the UK Chamber of Shipping. "Premature implementation risks higher costs for passengers and freight, with limited environmental gain."

The Call for Unity

BAR Technologies is calling for a single carbon policy that is globally agreed, fairly administered and financially transparent. The company continues to advocate for a bunker-level collection mechanism to fund climate-positive reinvestment, while avoiding the duplication and complexity of overlapping schemes.

"While we await consensus on a unified framework, we cannot afford inaction," Cooper continued. "We need technologies that work today, across regulatory zones—and wind propulsion is leading that charge."

What Shipowners Can Do

Until a global framework emerges, shipoperators should:

1. Map their compliance obligations across all trading zones they operate in
2. Invest in proven decarbonisation technologies like wind wings that work across regulatory regimes
3. Monitor regulatory developments in each jurisdiction closely
4. Engage with industry bodies advocating for harmonised global standards

The fragmented regulatory landscape presents real challenges, but it also underscores the need for technologies that deliver emissions reductions regardless of which scheme applies. Wind propulsion, energy efficiency measures, and careful fleet management can provide immediate benefits while the industry waits for regulatory clarity.