How IMO CII, EU ETS and FuelEU Maritime interact in 2026

Three separate rulebooks now govern the carbon a ship emits into and around Europe, and 2026 is the year they all bite at once. They measure different things, use different boundaries, and — critically — optimising for one can quietly make another worse. This is the map.

The three regimes at a glance

IMO CII (Carbon Intensity Indicator) rates a ship’s operational carbon intensity on an A–E scale. It applies to ships of 5,000 GT and above and has been in force since 2023, with ratings issued from 2024. A vessel rated D for three consecutive years, or E for a single year, must submit a corrective action plan. The required intensity tightens every year — roughly 11% below the 2019 baseline by 2026, heading toward about 21.5% by 2030.

EU ETS is cap-and-trade. Shipping companies must surrender emission allowances (EUAs) for their emissions. Coverage phased in during 2024–2025 and reaches 100% of covered emissions from 1 January 2026, with methane and nitrous oxide added alongside CO₂. The geographic boundary is 100% of intra-EU voyages, 100% at berth in EU ports, and 50% of voyages between an EU and a non-EU port.

FuelEU Maritime caps the well-to-wake greenhouse-gas intensity of the energy a ship uses, for vessels of 5,000 GT and above calling at EU ports. It has applied since 1 January 2025, allows pooling and banking of compliance across vessels and years, and issues penalties for exceedance.

Where they conflict

The regimes reward different behaviours:

• CII rewards low carbon per transport-work unit. The blunt way to improve it is to slow down — but slow steaming can strand cargo and hurt commercial performance.
• EU ETS rewards lower absolute covered emissions, because every tonne costs an allowance.
• FuelEU rewards lower lifecycle fuel intensity, which pushes toward alternative fuels regardless of speed.

A decision that flatters your CII rating may do little for your ETS bill, and a fuel switch that helps FuelEU may be the wrong lever for CII. Optimising each rule in isolation leaves money on the table and can create compliance whiplash.

The IMO Net-Zero Framework is coming behind them

At MEPC 83 in April 2025 the IMO approved, in principle, the first global GHG pricing mechanism for an entire sector — a Global Fuel Standard plus carbon pricing, targeting net-zero around 2050. Formal adoption was adjourned by a year at the October 2025 extraordinary session, with expected entry into force around 2027. For anyone modelling compliance cost, it is a fourth layer on the horizon, not a distant abstraction.

How to actually model it

The only defensible approach is a single model that speaks all of these languages at once and expresses the answer in the currency owners care about — cost per voyage and cost per year:

1. Build a bottom-up emissions model from AIS activity multiplied by vessel-specific fuel curves.
2. Calibrate it against verified EU MRV data, which publishes per-ship annual CO₂ and fuel for vessels over 5,000 GT calling at EU ports, so the numbers are MRV-grade rather than a spreadsheet guess.
3. Layer the cost engine across CII, EU ETS, FuelEU and UK ETS, optimising FuelEU pooling and banking.
4. Route with the trade-off explicit — weather routing that weighs voyage time against fuel and against CII penalty, not one in isolation.

That is exactly the work in our fleet decarbonization practice: turning four overlapping rulebooks into one number a board, a lender and a charterer can all act on.