The company that surrenders EU ETS allowances and the rules assigning its administering authority (EU Directive 2003/87)

Say the owner is one company and the operation of the ship is handled by another. When that ship calls at EU ports, allowances have to be surrendered, but which of the two surrenders them. Directive 2003/87 answers by pointing at a company rather than at a ship.

The answer does not stop there. The Directive assigns each such company its own administering authority, and it writes down how that assignment is made and when it changes. This article looks at the party that carries the obligation and at the administering authority, not at surrender percentages.

What surrenders is one company, not one ship

3. The Member States, administering Member States and administering authorities in respect of a shipping company shall ensure that, by 30 September each year: (a) the operator of each installation surrenders a number of allowances that is equal to the total emissions from that installation during the preceding calendar year, as verified in accordance with Article 15; (b) each aircraft operator surrenders a number of allowances that is equal to its total emissions during the preceding calendar year, as verified in accordance with Article 15; (c) each shipping company surrenders a number of allowances that is equal to its total emissions during the preceding calendar year, as verified in accordance with Article 3ge.

Three points sit side by side. An installation is surrendered for by its operator, an aircraft by the aircraft operator, and a ship by the shipping company. The subject of (c) is each shipping company. It is not the ship.

The quantity is at company level as well. It is the company’s total emissions for the preceding calendar year, not the emissions of one ship. Ships leaving or joining the fleet do not change that surrender happens once, at company level. The deadline is 30 September each year, the same date as for installation operators and aircraft operators.

That shipping company may not be the owner. Where another entity assumes ultimate responsibility for the purchase of the fuel or the operation of the ship under a contractual arrangement, the shipping company is entitled to reimbursement from that entity for the costs arising from the surrender. The same Directive requires Member States to secure that right. What does not move is the surrender itself, which stays with the shipping company. The cost travels and the obligation stays.

The administering authority follows the company, not the ship’s flag

1. The administering authority in respect of a shipping company shall be: (a) in the case of a shipping company registered in a Member State, the Member State in which the shipping company is registered; (b) in the case of a shipping company that is not registered in a Member State, the Member 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; (c) in the case of a shipping company that is not registered in a Member State and that did not carry out any voyage falling within the scope set out in Article 3ga in the preceding four monitoring years, the Member State where a ship of the shipping company has started or ended its first voyage falling within the scope set out in that Article.

The name the provision uses is administering authority in respect of a shipping company. That it attaches to a company rather than to a ship is in the name itself.

Where the company stands	Member State that becomes the administering authority
Registered in a Member State	that Member State of registration
Not registered in a Member State	the one with the greatest estimated number of port calls from in-scope voyages in the preceding four monitoring years
Not registered, and no in-scope voyage in the preceding four monitoring years	the one where a ship of the company started or ended its first in-scope voyage

Nowhere in the three limbs is the flag of the ship. What flag a ship flies does not settle the administering authority. The first limb reads where the company is registered, the second counts port calls from voyages the company performed, and the third reads where a ship of that company first entered or left.

The order is a ladder. Meeting a rung means not going down to the next one. For a company registered in a Member State, the place of registration settles it however the port calls are distributed.

The assignment is written into a list and follows until the list changes

What actually fixes the assignment is a list the Commission draws up by implementing act. Paragraph 2 of Article 3gf has that list updated on two separate tracks.

Who	How often the list is updated
Shipping companies registered in a Member State	before 1 February 2026, and every two years after that
Shipping companies not registered in a Member State	before 1 February 2028, and every four years after that

The first track carries companies that moved their Member State of registration within the Union and companies that have since started an in-scope activity. The second carries reattribution based on where the port calls fall. Because the cycles differ, the two kinds of change reach the list at different times.

What happens before the list is updated is in paragraph 3.

3. An administering authority in respect of a shipping company that, according to the list established pursuant to paragraph 2, is responsible for a shipping company shall retain that responsibility regardless of subsequent changes in the shipping company’s activities or registration until those changes are reflected in an updated list.

A company that moves its registration keeps the same administering authority. A company whose port calls shift keeps it too. The condition is until those changes are reflected in an updated list. Moving the registration today does not change who you deal with tomorrow.

What the administering authority secures is monitoring, reporting and verification

In respect of emissions from maritime transport activities listed in Annex I to this Directive, the administering authority in respect of a shipping company shall ensure that a shipping company under its responsibility monitors and reports the relevant parameters during a reporting period, and submits to it aggregated emissions data at company level in accordance with Chapter II of Regulation (EU) 2015/757.

The administering authority does not do the monitoring itself. It secures that the shipping company under its responsibility monitors and reports. What gets submitted is emissions data aggregated at company level, and the standard is Chapter II of Regulation 2015/757.

Verification runs to the same regulation.

The administering authority in respect of a shipping company shall ensure that the reporting of aggregated emissions data at shipping company level submitted by a shipping company pursuant to Article 3gd of this Directive is verified in accordance with the verification and accreditation rules set out in Chapter III of Regulation (EU) 2015/757.

Point (c) of paragraph 3 of Article 12 sets the surrender quantity as verified total emissions. Article 3ge is where that verification comes from. Aggregation is at company level, verification is at company level, and surrender is at company level. The same administering authority secures all three.

Allowances issued by another Member State count towards that company’s surrender

2. Member States shall ensure that allowances issued by a competent authority of another Member State are recognised for the purpose of meeting an operator’s, an aircraft operator’s or a shipping company’s obligations under paragraph 3.

Which Member State holds the administering authority does not tie down where the allowances come from. Allowances issued by the competent authority of another Member State also count towards the obligations under paragraph 3.

So the reason a company needs to know its administering authority is not where it buys allowances. It is that the authority settles who receives the reporting and the verification, and who secures the surrender.

Worth confirming

The passages above come from the consolidated text of Directive 2003/87 as at 1 March 2024. The assignment is written into a list the Commission establishes by implementing act, so which Member State a given company sits under has to be read off that list. The detailed rules on how administering authorities administer shipping companies are also set by Commission implementing acts. And the form the reimbursement right takes in national transposing law differs from one Member State to another.