EU Shipping Carbon Reimbursement Right Largely Unenforceable

A study by the Erasmus School of Law in Rotterdam warns that the statutory right for shipowners and managers to recover carbon costs under the EU Emissions Trading System (EU ETS) is effectively unenforceable. While the EU Directive grants a reimbursement right from the party that controls fuel purchase or vessel operation—typically a time charterer—in practice the right rarely holds up. The research cites three obstacles: unclear identification of the reimbursing party in multi‑layer charter chains, the dominance of English law in shipping contracts which may override national reimbursement provisions, and the fact that disputes are often arbitrated in London or Singapore, outside EU court jurisdiction. Consequently, the actual payment responsibility falls to the charterparty, management agreement or bill of lading, not the statutory mechanism. The findings have implications for the EU, the UK ETS and the IMO’s Net‑Zero Framework.