The key current EU market-based mechanism for controlling greenhouse gas emissions is the EU Emissions Trading Scheme (EU ETS) and covers energy-intensive industry and aviation.

The EU ETS Amending Directive 2009 states that the EU should include emissions from shipping in its greenhouse gas reduction commitments if no agreement is reached by 31 December 2011 at an international level. No international agreement was reached by that date and in January 2012, the Commission launched a public consultation on inclusion of maritime transport emissions in the EU's greenhouse gas reduction commitment.

On 1 October 2012, the European Commission issued a statement that existing international efforts to limit shipping GHG emissions are not enough. In view of this, the Commission intends to set up an EU system to monitor, report and verify the fuel consumption of ships in early 2013. The EU Commission will consider following this with a market-based mechanism to limit emissions. There were no further details of the proposals.

When further details of its proposed system are made available by the Commission (we will report on these when they are announced), ship purchasers, owners and charterers should consider how these changes are likely to affect them and how best to allocate risk and liability for compliance with a developing regulatory landscape in their contracts.