A study from Erasmus University Rotterdam finds that the statutory reimbursement right built into the EU ETS for shipping is often ineffective in practice. The mechanism is meant to let shipowners recover carbon costs from charterers who control fuel use and routing. But complex charter chains, English governing law, and arbitration outside EU courts make the right hard to enforce. The study calls the provision a paper tiger and says the European Commission has not acknowledged the problem. The research points to three main issues. First, multi-layered charter agreements split responsibility across parties, and the directive does not clarify who pays. Second, most shipping contracts fall under English law, which has no equivalent reimbursement mechanism. Third, disputes go to London or Singapore arbitration, where EU court rulings may not be recognized. The authors recommend that owners, managers, and charterers negotiate carbon cost allocation in contracts rather than rely on the directive. These findings also apply beyond the EU. The UK's shipping ETS started in July 2026 without any statutory reimbursement right. The IMO's Net Zero Framework would face even more complexity. The study suggests the European Commission should use upcoming delegated acts to fix the mechanism rather than treat it as a working tool.
