{"id":1049,"date":"2026-10-19T11:33:51","date_gmt":"2026-10-19T11:33:51","guid":{"rendered":"https:\/\/regulasshipping.com\/blog\/ecsa-says-smap-needs-330-million-eu-ets-allowances-through-2040\/"},"modified":"2026-10-19T11:33:51","modified_gmt":"2026-10-19T11:33:51","slug":"ecsa-says-smap-needs-330-million-eu-ets-allowances-through-2040","status":"publish","type":"post","link":"https:\/\/regulasshipping.com\/blog\/ecsa-says-smap-needs-330-million-eu-ets-allowances-through-2040\/","title":{"rendered":"ECSA says SMAP needs 330 million EU ETS allowances through 2040"},"content":{"rendered":"

European Shipowners | ECSA published an in-house study calling on the European Parliament and the Council to triple the EU Emissions Trading System allowances reserved for the proposed Sustainable Maritime Alternative Propulsion mechanism. The working primary is the October 2026 paper, \u201cCreating a market for sustainable maritime fuels and technologies,\u201d released with a 15 October press note and carried into the trade press on 19 October. ECSA\u2019s model says the Commission\u2019s proposed SMAP reserve of 110 million allowances for 2028\u20132040 would cover only about one third of what is needed. The association\u2019s minimum is at least 330 million allowances, about EUR 30\u201333 billion at the study\u2019s illustrative EUR 100 per allowance. Secretary General Sotiris Raptis said the Parliament and the Council \u201cmust at least triple the earmarked ETS revenues in SMAP to provide a credible market signal.\u201d This is an association study and a legislative ask. It is not adopted text, not a FuelEU amendment, and not a change to the 2026 surrender obligation that is already in force.<\/p>\n

The instrument under discussion is the European Commission\u2019s proposal for a Directive amending Directive 2003\/87\/EC and Decision (EU) 2015\/1814, COM(2026) 616 final. SMAP would sit inside that ETS revision. It would not pay cash grants. It would award EU ETS allowances to shipping companies using eligible sustainable fuels and technologies, with the monetary value of those allowances intended to cover part of the remaining cost gap against conventional fuels and against the additional cost of technologies. Under the Commission proposal those support rates are 55 per cent of the remaining price differential for biogas and advanced biofuels, 80 per cent for low-carbon hydrogen and low-carbon fuels, 90 per cent for renewable fuels of non-biological origin, and 90 per cent of the additional cost of technologies. Those percentages are the Commission\u2019s proposed rates. They are not a guarantee. ECSA\u2019s paper is explicit: if claims exceed the reserve, support on each claim would be reduced proportionately.<\/p>\n

What the study actually models<\/h2>\n

Maritime transport has been in the EU ETS since 1 January 2024. From the 2026 reporting year, after the phase-in, companies must surrender allowances for 100 per cent of emissions inside the ETS scope. Unlike steel, cement, chemicals and aviation, shipping has never received free allowances. ECSA\u2019s figures, built on European Environment Agency verified-emissions data and the EEX 2026 auction calendar, are that shipping accounts for around 10 per cent of ETS emissions but purchases about 90 million allowances a year, almost 20 per cent of allowances auctioned. At EUR 100 per allowance that is about EUR 9 billion a year. The EUR 100 price is a modelling assumption, not a quoted market print and not a fixed annual invoice.<\/p>\n

Against that annual contribution the Commission would reserve a maximum of 110 million allowances for SMAP across the entire 13-year window from 2028 to 2040. Spread evenly, that is about 8.5 million allowances a year, less than 10 per cent of shipping\u2019s annual surrender. ECSA\u2019s model starts from an estimated 27.5 million tonnes of oil equivalent a year of energy demand for ships in the relevant ETS scope, drawing on EMSA THETIS-MRV public-emission data for the 2025 reporting year. It then applies an uptake pathway for sustainable fuels and technologies, including energy-efficiency projects, informed by FuelEU Maritime targets and by the Commission\u2019s own impact assessment, SWD(2026) 616 final. Fuel differentials are converted to allowances at EUR 100 after applying the proposed SMAP support rates. Technology support is converted the same way at a 90 per cent rate on estimated additional cost.<\/p>\n

The result printed in the paper is a minimum of 330 million allowances over 2028\u20132040. The shortfall against the Commission\u2019s 110 million is about 220 million. At current annual emission levels, shipping would surrender about 1.17 billion allowances over the same period. The modelled SMAP minimum is about 28 per cent of that volume. The Commission\u2019s 110 million is about 9 per cent. At EUR 100 those volumes are about EUR 33 billion of SMAP support against about EUR 117 billion of cumulative surrender. Even at 330 million, ECSA says, less than one third of shipping\u2019s ETS contribution would go back into the sector\u2019s own decarbonisation. The Commission\u2019s impact assessment, as cited in the paper, suggests SMAP could contribute annual greenhouse-gas reductions of between 1.7 and 9 million tonnes of CO\u2082 by 2035, depending on the funding available. That range is the Commission\u2019s, not an ECSA measurement.<\/p>\n

Raptis\u2019s operator line is the eligibility point as much as the volume point. \u201cSMAP can contribute to the energy transition of shipping, but only if it is sized to match the scale of the challenge and covers all technologies that deliver carbon savings.\u201d ECSA wants energy-efficiency projects inside the mechanism, not only alternative fuels and new propulsion. European shipowners, the paper says, account for 44 per cent of the global orderbook for sustainable-fuel-capable vessels by tonnage, the largest regional share on Clarksons data as used in ECSA\u2019s 2026 economic-value annex. High fuel cost, limited availability and barriers to technology deployment are the reason the association says a reserve that is too small will not convert that orderbook into actual uptake.<\/p>\n

What the paper does not settle<\/h2>\n

The study is dated October 2026. Contributors are Dugald Wallace and Fanny Lossy, reviewed by Luisa Puccio. It carries a standard disclaimer: ECSA does not guarantee accuracy or completeness. The modelling limitations are printed in the paper and should stay in any operator brief. Future fuel prices, production capacity and uptake remain uncertain. The Commission has not yet established the detailed methodology for calculating the remaining price differential, including how existing EU ETS, FuelEU Maritime and other incentives will be netted off. Technology cost, uptake and abatement data are thinner still. The model excludes the proposed bonus increases for eligible island voyages, qualifying fuel feedstocks and technologies fitted in EU shipyards, which means 330 million is presented as a minimum relative to a scenario in which those bonuses apply.<\/p>\n

Sustainable fuels are, on ECSA\u2019s average, four times more expensive than conventional fuels. That multiple is an association figure, not a bunker-invoice print for a named grade in Rotterdam or Algeciras. Do not load it into a voyage estimate as a 2026 surcharge. Do not treat 330 million allowances as a compliance instrument you can put in a 2028 time-charter. The proposal remains subject to the European Parliament and the Council. COM(2026) 616 is the Commission text. SMAP, if adopted in the form ECSA wants, would not start awarding allowances until 2028. The 2026 reporting year is already on 100 per cent surrender for in-scope emissions. That obligation does not wait on SMAP.<\/p>\n

This file is also not a rewrite of the IMO Net-Zero Framework talks, not a MARPOL Annex VI amendment, and not a substitute for FuelEU Maritime\u2019s existing GHG-intensity reduction on EU-related voyages. FuelEU\u2019s 2040 target is the policy hook ECSA uses for why SMAP should be large enough to create a fuel market. It is not a new FuelEU number in this paper. Keep EU ETS cost lines in European voyage estimates. Keep FuelEU intensity lines. Add SMAP only as a 2028\u20132040 legislative case: Commission 110 million versus ECSA 330 million, with proportionate cuts if the reserve is oversubscribed, and with energy-efficiency eligibility still being argued.<\/p>\n

Operational implications<\/h2>\n

For a DPA, a European owner, or a charterer with EU-related employment, Monday\u2019s useful fact is the size of the proposed reserve against a surrender obligation that is already 100 per cent, not a new carbon price. If SMAP is adopted at 110 million allowances over 13 years, the support rates printed in COM(2026) 616 are a ceiling that can be cut. A company that bunkers RFNBO or fits an energy-efficiency system on the assumption of 90 per cent gap-coverage can be paid less if claims exceed the pot. That is a budgeting and clause problem before it is a press-release problem. ECSA\u2019s 330 million ask is an attempt to make the signal large enough that fuel producers and technology vendors can plan against it. It is still an ask.<\/p>\n

Charter and newbuild files for 2028\u20132040 EU-related work should now carry three carbon lines, not one. First, EU ETS surrender at 100 per cent of in-scope emissions from the 2026 year, with no free allowances. Second, FuelEU intensity on the existing trajectory toward 2040. Third, a SMAP case that is either the Commission\u2019s 110 million reserve with possible pro-rata cuts, or ECSA\u2019s 330 million reserve with energy-efficiency inside the eligible set. Do not drop the first two because the third is in the trade press. Do not assume energy-efficiency capex will be SMAP-eligible until the adopted directive says so. Do not assume island, feedstock or EU-yard bonuses until the methodology exists.<\/p>\n

National ETS-revenue recycling remains a separate clock. ECSA\u2019s earlier 2026 revenue paper is cited for the EUR 9 billion annual contribution figure. SMAP, as proposed, would be a Union-level allowance reserve awarded to companies, not a national grant programme. A member state that already recycles auction proceeds into port power or alternative-fuel infrastructure is not a substitute for SMAP, and SMAP is not a substitute for that national spend. Operators should not brief owners that a 330 million reserve has been agreed, and they should not brief that the 110 million figure is already law. Watch the Parliament and Council texts, the methodology for the remaining price differential, and whether energy-efficiency projects stay in the eligible list.<\/p>\n

Do not recast the study as a carbon-price cut, as a free-allowance allocation to shipping, as a FuelEU delay, as an IMO Net-Zero Framework substitute, or as a 2026 compliance holiday. The confirmed public facts are an ECSA October 2026 in-house study and 15 October press note, carried 19 October: shipping about 10 per cent of ETS emissions and about 90 million allowances a year with no free allocation; COM(2026) 616 SMAP reserve of 110 million allowances for 2028\u20132040; ECSA minimum 330 million; support rates 55 \/ 80 \/ 90 \/ 90 per cent as proposed; proportionate cuts if oversubscribed; energy-efficiency eligibility still being argued; Parliament and Council still to decide.<\/p>\n

What Operators Should Note<\/h2>\n