How Ship Emissions Are Measured and Reported

Shipping is the invisible engine of the global economy. Around 80 to 90 percent of everything traded in the world spends part of its journey on a ship, and the vessels that carry it burn enormous quantities of fuel far out of public sight. That fuel adds up. International shipping is responsible for roughly 3 percent of global greenhouse gas emissions, close to a billion tonnes of carbon dioxide every year, a footprint comparable to that of a major industrial economy. For most of the industry's history, those emissions went essentially uncounted. That has changed dramatically over the past decade. A detailed, increasingly strict architecture now exists to measure, verify, report, and ultimately put a price on what ships emit, because the old management maxim holds especially true here: you cannot cut what you do not measure.

This article walks through that architecture step by step, from the fuel in a ship's tanks to the international climate policies that verified data now drives. Along the way it explains not just what happens at each stage, but why each stage exists and how the pieces fit together into one of the most ambitious emissions-accounting systems ever built for a global industry.

 

1. Fuel Consumption Is Tracked

 

Everything begins with fuel. During every voyage, a ship records the type and quantity of fuel it takes on and burns, and this record is the foundation on which all emissions accounting rests. The data comes from several sources that can be cross-checked against one another: bunker delivery notes issued when fuel is loaded, tank soundings taken before and after a voyage, and, increasingly, automated flow meters that measure consumption in real time.

The reason fuel is the starting point is subtle but important. Unlike a factory smokestack, a ship does not generally need sensors sniffing its exhaust to know how much carbon dioxide it produces. The carbon content of marine fuel is known and stable, so the emissions follow almost deterministically from the amount and type of fuel consumed. In effect, the fuel gauge is the emissions meter. This is also why the type of fuel matters as much as the quantity: heavy fuel oil, low-sulphur fuel oil, marine gas oil, liquefied natural gas, methanol, and ammonia each carry a different amount of carbon per tonne, and some, such as ammonia, contain no carbon at all. Recording exactly what was burned, and how much, is therefore the single most important measurement in the entire chain.

 

2. Emissions Are Calculated

 

Once fuel use is known, carbon dioxide emissions are calculated using standardized emission factors. Each fuel type is assigned a carbon factor, a fixed figure representing how much carbon dioxide is released per tonne of that fuel burned. For a typical heavy marine fuel, burning one tonne produces a little over three tonnes of carbon dioxide, because the combustion process combines the fuel's carbon with oxygen from the air, adding mass. Multiplying the tonnes of each fuel consumed by its carbon factor yields the ship's carbon dioxide output, with no need for direct measurement of the exhaust.

Two refinements are making this calculation more sophisticated over time. First, regulators are broadening the scope beyond carbon dioxide to include other potent greenhouse gases, particularly methane, which can slip unburned from some engines, and nitrous oxide. Second, accounting is shifting from a "tank-to-wake" basis, which counts only what the ship itself burns, to a "well-to-wake" basis, which also counts the emissions created in producing and delivering the fuel. That distinction is far from academic. A fuel that burns cleanly on board may still carry a heavy carbon burden from its manufacture, and only well-to-wake accounting reveals whether an alternative fuel is genuinely better for the climate or simply moves the emissions upstream.

 

3. Distance and Cargo Are Recorded

 

Knowing how much carbon dioxide a ship emits is only half the story. To judge how efficiently it emits, you also need to know how much useful work it did. So operators additionally record the distance traveled, the time spent at sea, and the amount of cargo carried on each voyage. Together these figures describe the ship's transport work, usually expressed as cargo capacity multiplied by distance.

Combining emissions with transport work produces a measure of carbon intensity, typically the grams of carbon dioxide emitted to move a tonne of cargo one nautical mile. This normalization is what makes fair comparison possible. A giant container vessel emits vastly more total carbon dioxide than a small coastal freighter, yet per tonne of goods carried it may be several times more efficient. Without accounting for distance and cargo, raw emissions totals would unfairly penalize the large, efficient ships that actually do the heavy lifting of world trade. Carbon intensity, rather than absolute emissions alone, is therefore the metric at the heart of how individual ships are judged.

 

4. Energy Efficiency Is Measured

 

To turn carbon intensity into something enforceable, the International Maritime Organization, the United Nations body that regulates global shipping, introduced two complementary metrics, both mandatory since the start of 2023 under amendments to the international MARPOL Annex VI convention.

The first is the Energy Efficiency Existing Ship Index, or EEXI. This is a technical, design-based measure that applies to ships of 400 gross tonnage and above. It assesses how efficient a ship is as a piece of engineering, based on its installed engine power, its cargo capacity, and its reference speed, and it must meet a minimum standard through a one-time certification. Many older ships comply by limiting their engine power, which in practice means agreeing to sail a little more slowly.

The second is the Carbon Intensity Indicator, or CII, which applies to larger ships of 5,000 gross tonnage and above. Unlike the EEXI, the CII measures actual operational performance over a full year of real voyages, capturing not just how the ship was built but how it is actually run. Each year a ship's measured carbon intensity is compared against a required level that tightens by roughly 2 percent annually, part of the industry's commitment to cut carbon intensity 40 percent by 2030 relative to a 2008 baseline. The result is recorded in the ship's energy efficiency management plan. The key insight is that these two metrics catch different problems: a beautifully designed ship that passes its EEXI can still earn a poor CII if it is operated wastefully, and only measuring both captures the full picture.

 

5. Data Is Verified

 

Self-reported numbers are not taken on trust, because too much now rides on them. Before emissions data becomes official, it is checked by independent, accredited verifiers, a role usually filled by the major classification societies that already inspect ships for safety. These verifiers compare a ship's reported fuel figures against its bunker delivery notes, logbooks, and other operational records to confirm that the numbers are accurate and that they were gathered according to approved monitoring plans.

Verification is the quiet linchpin of the entire system. Under the European Union's monitoring rules, independent verification is mandatory and results in a formal document of compliance carried on board. Under the IMO's operational rules, flag states confirm each ship's carbon intensity rating. The reason for all this scrutiny is straightforward: emissions data is on its way to becoming a financial instrument, something that can be taxed, traded, and used to allocate real money. The "polluter pays" principle only functions if the record of what each polluter emitted is trustworthy enough to withstand a challenge, and independent verification is what gives the numbers that credibility.

 

6. Annual Reports Are Submitted

 

Verified data is then formally reported, and here a ship trading internationally typically finds itself reporting into more than one system at once. Two overlapping regimes dominate.

The first is the IMO's Data Collection System, which since 2019 has required ships of 5,000 gross tonnage and above to report their annual fuel oil consumption, along with distance sailed and hours under way, to their flag state, which in turn passes aggregated data to the IMO. From 2024 the annual carbon intensity rating became part of this submission. The second is the European Union's Monitoring, Reporting and Verification regulation, in force since 2018, which requires ships calling at ports in the European Economic Area to monitor, independently verify, and report their emissions to the European Commission, generally by the end of March each year. That regime has been progressively widened, drawing in additional ship types and expanding from carbon dioxide alone to methane and nitrous oxide.

The practical consequence is a compliance patchwork. A single vessel on a global trade route may report the same underlying voyages into an international system, a regional European system, and, increasingly, other national schemes, each with its own thresholds, formats, and deadlines. Managing this overlap has become a significant administrative task in its own right, and a small industry of software and verification services has grown up to handle it.

 

7. Performance Is Rated

 

Raw data becomes a public-facing signal when it is converted into a rating. Based on its annual carbon intensity, each large ship receives a grade from A to E, where A represents superior performance and E the worst, with the first such ratings issued in 2024 for the 2023 reporting year. A rating of C or better is considered compliant. A ship that scores D for three consecutive years, or E in any single year, must draw up a corrective action plan showing how it will get back to a C or above, while regulators and ports are encouraged to offer incentives to the cleanest A and B rated vessels.

The genius of a simple letter grade is that it translates a complex technical calculation into a signal the whole market can read. A poor rating is not just a regulatory problem; it is a commercial and reputational one. Charterers weighing which vessel to hire, cargo owners tracking the carbon footprint of their supply chains, banks deciding which ships to finance, and insurers assessing long-term risk can all glance at a rating and draw conclusions. In this way the rating quietly reshapes incentives across the industry, rewarding efficient operation with business and penalizing waste with cost.

 

8. Data Drives Decarbonization

 

The final step is where all this measurement pays off, as verified emissions data flows into a rapidly expanding set of climate policies and commercial decisions. What was once a purely environmental accounting exercise has become the basis for real financial consequences.

The most consequential development is carbon pricing. Since January 2024, the European Union's Emissions Trading System has covered shipping, requiring companies to buy and surrender allowances for the carbon dioxide their ships emit on European voyages. The obligation is being phased in deliberately, covering 40 percent of reported 2024 emissions, rising to 70 percent for 2025, and reaching 100 percent from 2026, at which point methane and nitrous oxide are also drawn in. In its first year the system captured roughly 90 million tonnes of verified carbon dioxide, and compliance was remarkably high, with companies surrendering allowances covering more than 99 percent of what they owed. Running alongside it, the FuelEU Maritime regulation took effect in 2025, setting a well-to-wake limit on the greenhouse gas intensity of the energy ships use, tightening steadily toward mid-century, and imposing substantial penalties on vessels that exceed it while effectively rewarding those that switch to cleaner fuels. The United Kingdom is extending its own emissions trading scheme to shipping as well.

At the global level, the picture is more ambitious and, at present, more uncertain. In 2023 the IMO adopted a revised greenhouse gas strategy calling for net-zero emissions from international shipping by or around 2050, with indicative checkpoints along the way and a target for zero and near-zero fuels to make up at least 5 percent, striving for 10 percent, of the energy the sector uses by 2030. To deliver on that strategy, IMO members approved in principle, in April 2025, a landmark measure known as the Net-Zero Framework. If enacted, it would combine a global fuel standard based on greenhouse gas intensity with a global carbon price, making shipping the first entire industry in the world to face binding, worldwide emissions limits backed by a price on pollution. It would apply to ships above 5,000 gross tonnage, which produce around 85 percent of the sector's carbon dioxide, and channel payments from higher-emitting ships into a fund that rewards cleaner ones. The framework's formal adoption, however, was expected in October 2025 and was instead adjourned for a year amid unusually intense political disagreement among member states, including opposition from some governments. The resumed negotiations are expected in late 2026, and even under an optimistic timeline the rules would not take effect until around 2028, leaving the industry to plan amid genuine uncertainty about the shape of the final global regime.

Regulation is not the only force pulling on this data. Major banks that finance ships have committed, under an initiative known as the Poseidon Principles, to align their lending portfolios with the industry's climate goals, using emissions data to steer capital toward cleaner vessels. Ports increasingly offer discounted fees to ships with strong environmental ratings, and large charterers factor emissions performance into their hiring decisions. In each case, the verified numbers produced by the measurement chain are what make the judgment possible. This is the deeper point of the entire system: measurement is not an end in itself but the substrate on which every other decarbonization lever, from carbon pricing to green finance to fuel choice, is built. Without trustworthy data at the bottom, none of the policies above it could function.

 

Did You Know?

 

International shipping is responsible for around 3 percent of global greenhouse gas emissions, close to a billion tonnes of carbon dioxide a year, which is why emissions monitoring has become such a critical part of the industry's decarbonization effort. There is a striking asymmetry worth noting, though. The technical challenge of measuring shipping's emissions has largely been solved: the fuel-based accounting is reliable, the metrics are defined, the verification works, and the reports are flowing. The harder challenge, as the stalled global negotiations show, is no longer measuring emissions but agreeing on how quickly to cut them and who should bear the cost. The data architecture is now the mature foundation. What gets built on top of it is the defining question for the next decade of shipping.

 

Note: This article reflects the state of maritime emissions regulation as of mid-2026, drawing on sources including the International Maritime Organization, the European Commission, the Fourth IMO Greenhouse Gas Study, and classification-society guidance. Regulatory details, phase-in schedules, and the status of the IMO Net-Zero Framework are evolving, and specific figures are the most recent authoritative estimates available.