Engine optimisation in sharp focus as EU ETS fully phases in for shipping

With maritime transport now subject to the 100% phase-in of the EU Emissions Trading System (EU ETS), shipowners are intensifying efforts to optimise engine performance to control rising emissions-related costs, according to German engine diagnostics specialist CM Technologies GmbH (CMT).

From 1 January 2026, vessels operating between EU ports must surrender EU Allowances covering the full volume of verified greenhouse gas emissions, marking the end of the transitional arrangements introduced in 2024. As a result, emissions exposure has shifted from being primarily a compliance obligation to a central component of voyage economics.

Industry data published in early 2026 suggests that full ETS compliance adds roughly US$320 per tonne of VLSFO consumed on intra-EU voyages, depending on prevailing carbon allowance prices and regulated fuel emission factors. While the exact figure fluctuates with carbon markets and exchange rates, CMT notes that the magnitude of the cost has sharpened operational focus on fuel efficiency and combustion performance.

“Under full ETS exposure, emissions costs are clearly visible at voyage level, meaning even small inefficiencies now carry a direct financial consequence,” said David Fuhlbrügge, joint Managing Director of CMT.

According to the company, gradual losses in combustion efficiency remain one of the most common and preventable drivers of excess emissions. Issues such as retarded ignition timing, uneven cylinder loading or injector wear can develop incrementally without triggering alarms, yet steadily increase fuel consumption. Under the ETS framework, every additional tonne of fuel burned directly increases the volume of allowances required.

Fuhlbrügge said shipowners and managers are making greater use of performance analytics, fuel monitoring and onboard combustion analysis as carbon pricing becomes embedded in day-to-day operations.

This shift is echoed by leading classification societies. Recent guidance from DNV and ClassNK highlights the need for tighter operational control of fuel consumption and engine condition, alongside robust monitoring and verification of emissions data, to manage ETS exposure effectively.

CMT reports growing demand for onboard combustion diagnostics to assess ignition timing and cylinder balance under real operating conditions, enabling corrective adjustments before inefficiencies escalate. Operators are also paying closer attention to wear-related efficiency losses associated with low-sulphur fuel use, as liner and piston-ring wear can increase friction and fuel demand well before conventional maintenance thresholds are reached.

The 2026 expansion of the EU ETS to include methane and nitrous oxide further underlines the importance of combustion quality, the company adds. These gases have a significantly higher global warming potential than CO₂, meaning incomplete combustion events can lead to a disproportionate increase in carbon-equivalent emissions.

“The ETS price itself is beyond an operator’s control,” Fuhlbrügge said. “What has changed is that engine performance now feeds directly into emissions cost. Maintaining efficient combustion is no longer simply good engineering practice; it is an essential element of managing operating risk in a carbon-priced environment.”

CMT expects engine optimisation to become increasingly integrated with emissions reporting, voyage performance analysis and commercial decision-making as ETS costs are fully reflected in charterparty negotiations.