The European Union has defended itself against criticism from a green group that its new Emissions Trading System (ETS) for shipping is letting owners "off the hook".

Campaign organisation Transport & Environment (T&E) said on Thursday that loopholes and exemptions will let 25.8m tonnes of CO2 slip through the carbon pricing net.

T&E said vessels of under 5,000 gt are excluded, as well as certain ships serving the offshore oil and gas industry, plus tugs and dredgers.