EU ETS: From compliance to cost-effective sustainability. A detailed solutions list

With the EU Emissions Trading System (EU ETS) extending to the maritime industry from 1 January 2024, shipping companies have even more reason to take action to reduce emissions in the upcoming year.
By Carly Minsky
January 30, 2024

With the EU Emissions Trading System (EU ETS) extending to the maritime industry in 2024, shipping companies have even more reason to take action to reduce emissions in the upcoming year.

In practical terms, shipping companies will be paying (via pre-acquired tradeable European Union Allowance (EUA)) to compensate for 40% of emissions they produce within Europe in 2024, rising to 70% of emissions in 2025 and 100% of emissions from 2026 onwards.

This adds to a complex landscape of emissions-focused regulations in the maritime industry, including the Energy Efficiency Existing Ship Index (EEXI), the Carbon Intensity Index (CII) and FuelEU Maritime, which impose reporting obligations, ratings and quotas on ships.

With that in mind, now is the time for shipping companies to understand their options and opportunities to reduce CO2 emissions produced over 2024 and beyond.

Some solutions have an immediate effect on reducing emissions but are expensive and require vessel downtime, retrofits or significant time and resources to install (like wind power solutions), while other less expensive options, like optimisation systems, take longer to significantly reduce emissions.

An emissions-reduction plan should include a number of these solutions – many of which are compatible – to achieve immediate effects while also investing in more sustainable operations over the medium- and long term.

Signol, a behavioural change service that engages seafarers to implement fuel-saving behaviours more often and more effectively, has created savings within days of implementation for shipping clients, without the need for significant financial investment or vessel downtime for installation. In this blog, we’ve selected and categorised other solutions with the potential to reduce ships’ emissions over the short-, medium- and long-term and highlighted the financial cost and time-to-install for each.


Unlock sustainable shipping: Get your emission reduction cheat sheet and browse the categories, including specific solution providers.

Short-term ways to reduce emissions

Short-term ways to reduce emissions

Behaviour change solutions
Cost: Low | Vessel downtime or installation needed? No

The quickest and most straightforward way to reduce ships’ emissions is by reducing fuel consumption, and a behaviour change service like Signol’s enables lower fuel usage during a vessel’s usual operations without requiring training or retrofitting.

Signol does this by identifying specific operational processes where fuel can be saved by modifying human behaviour and decisions – including main engine usage, engine maintenance, auxiliary engine usage and managing power demand on board.

Crew members are supported to make fuel-saving decisions with individual, realistic fuel-saving goals, behaviour change techniques delivered through a web app and email communications, and a detailed, personalised dashboard to track and understand fuel-saving progress.

Signol’s projects with maritime clients like Ridgebury Tankers, BSM and Young Brothers delivered over 5% fuel savings and emissions reductions in less than six months.

Since Signol uses the data collection and reporting processes already in place on vessels – from noon reports up to high-definition IIoT data – these emissions reductions are achieved without the need to install any additional technology on board. This makes Signol an affordable and quick-acting solution to reduce the cost of EU ETS compliance.


Cost: High | Vessel downtime or installation needed? Yes

Scrubbing systems can be installed to treat exhaust from ships’ engines, removing the harmful components of emitted gasses (including sulfur oxides and nitrogen oxides).

As a result, harmful emissions can be reduced without lowering fuel consumption. Different scrubbing systems require more or less structural modifications to install and need different ongoing maintenance. But for all systems, installation and usage is a significant investment both in terms of expense and time and resource.


Fuel emulsion technology
Cost: Medium | Vessel downtime or installation needed? Yes

Another solution to produce ‘cleaner’ fuel consumption and combustion is fuel emulsion technology, which creates a stable emulsion of fuel with up to 30% water. The result burns more completely than fuel alone, which means fuel can be saved due to combustion efficiency.

It’s estimated that this can reduce fuel consumption by up to 7%. According to Tecnoveritas – one provider of fuel emulsion technology for shipping – the technology requires installation but no modifications to the engine or disruptions to engine operation.


Alternative power sources
Cost: High | Vessel downtime or installation needed? Yes

Replacing fuel with alternative power sources like wind and solar power will quickly reduce emissions produced, but inevitably making this transition requires significant modifications to vessels.

To date, solutions put into action are hybrid solutions – where solar, wind and electric power are used alongside fuel engines, including Carisbrooke Shipping’s use of solar panels and Cargill’s trial of wind power.

While it’s thought that wind power could potentially reduce fuel consumption by up to 30%, the industry currently relies on bold first-movers who are willing to take a risk and potentially make a loss on the investment – like Cargill, whose shipping business president acknowledged that the cost savings were unlikely to deliver positive financial returns on the investment.


Ship design modifications
Cost: High | Vessel downtime or installation needed? Yes

Modifying ships themselves can reduce the power needed to run the ship – which in turn reduces emissions produced. Innovations in ship design specifically aimed at reducing emissions include adapted hulls, propeller cones and aerodynamic superstructures.

Streamlining hulls is one of the most common approaches within sustainability-focused naval architecture, using fluid dynamics to design hulls which minimise water resistance and so “glide’ more efficiently through water.

Other modifications include installing propeller cones to reduce energy loss from propellers, which can improve fuel efficiency by 3-5%, according to engineering firms.

Recent research has explored the potential for aerodynamic superstructures on ships to improve energy efficiency by reducing aerodynamic drag. The innovation also harnesses fluid dynamics but is applied to airflow and pressure by designing superstructures with outwardly curved rather than squared edges.

Modifying ships in these ways – and others – can have an immediate effect on energy efficiency and reducing emissions, but requires significant structural modifications and vessel downtime.


Alternative fuels
Cost: High | Vessel downtime or installation needed? Yes

Using alternative fuels to power ships can significantly lower emissions compared to conventional fuels, but there are limits on the current opportunities to use alternative fuels.

Biofuels – derived from organic matter like plant oils and animal fats – produce significantly lower amounts of greenhouse gases, but current availability and projected availability based on production facilities is limited. In the absence of long-lasting trials of biofuels onboard vessels, experts also caution that a better understanding of biofuel compatibility with existing ship machinery is needed before it can be widely adopted.

Another promising area of development is the use of ammonia, which also produces significantly lower emissions than fuels like HFO and MGO. However, using ammonia can be significantly more expensive since its lower calorific value means more fuel is required to produce the same energy. Shipping companies (including charterers and managers) must also implement operational and design safeguards to protect seafarers from the safety hazards of using ammonia.

Liquified natural gas (LNG) produces less greenhouse gases and air pollutants than conventional fuel (up to 23% lower emissions), but also brings additional operational and safety challenges. Keeping LNG at the low temperatures required means that bunkering is not straightforward, although the LNG bunkering infrastructure is improving due to increased uptake. Using LNG onboard currently requires high investment for shipping companies, including engine modifications. Recent studies have highlighted the risk that investing heavily in LNG-capable vessels could result in significant losses and stranded assets.

Medium and long term ways to reduce emission

Optimisation software
Cost: Low / medium | Vessel downtime or installation needed? No

There are a range of optimisation technology solutions available for the shipping industry that can lower emissions produced by optimising voyages, vessel performance, and bunkering.

For example, software and analytics can help implement more efficient voyages by addressing the route and speed, while weather insights and analysis can also support decisions which result in more efficient voyages and vessel performance.


Continuous monitoring technologies
Cost: Medium | Vessel downtime or installation needed? No

Continuous or real-time monitoring of individual vessels is another way to optimise ships’ performance, operations and voyages to reduce emissions.

This is achieved with monitoring technologies – also referred to as IoT technologies – which collect and report operational data ‘from ship to shore’ for better decision-making and diagnostics when needed.

While this can deliver real-time efficiency gains and emissions reductions, its significant value is the ability to drive longer-term vessel performance and innovation strategies.


Power management systems
Cost: Medium | Vessel downtime or installation needed? Yes – if not installed at build

Power management systems can ensure the optimal use of a ships’ total power resources in a way that is energy efficient, safe and as environmentally friendly as possible.

A PMS generally integrates and communicates with other control systems, enabling automation and vessel performance optimisation, which can reduce emissions resulting from inefficiencies.


Air lubrication
Cost: High | Vessel downtime or installation needed? Yes

Air lubrication systems work to reduce water resistance by generating a ‘carpet’ of microbubbles on the flat underside of a ship’s hull. The technology has been shown to reduce fuel consumption and greenhouse gas emissions by up to 10%.

Using air lubrication on existing ships requires retrofitting, which is generally completed during the ships’ usual dry-docking period.


Long-term ways to reduce emissions

Propeller innovation
Cost: High | Vessel downtime or installation needed? Yes

Developments in propeller design can enable more efficient vessel propulsion, so that ships’ ultimately need to use less fuel to move through water.

Commercial solutions currently available include an energy-saving attachment added to the propeller, which counters the swirls created by the propeller to produce more efficient propulsion. Research has also shown that 3D printing can create new types of propeller blades which perform better, using new designs and materials that are not an option when using traditional manufacturing.