Navigating the Waters of Change

In the wake of global initiatives to combat climate change, the European Union is setting sail towards a greener horizon with the introduction of the FuelEU Maritime regulations, slated to come into force from 2025. This pioneering move aims to steer the maritime industry towards decarbonization, aligning with the broader EU goal of slashing greenhouse gas (GHG) emissions by at least 55% by 2030, compared to the 1990 levels. But what exactly does FuelEU Maritime aim to achieve, and who is it aimed at?

The Essence of FuelEU Maritime

The FuelEU Maritime is a regulatory framework that mainly targets two aspects of maritime operations:

Limiting GHG emission intensity of ships over 5,000 gross tonnage: Such ships that dock at or depart from EU/EEA ports will need to comply with a cap on the annual average GHG emissions per unit of energy used, starting with a base cap level of 89.3 gCO2/MJ in 2025. This cap will be subject to a tightening every five years for a gradual shift to cleaner fuels for more efficient energy usage.

Mandating On-Shore Power Supply (OPS) from 2030: Certain vessels, such as containerships and passenger ships, will be required to utilize OPS or zero-emission technologies while moored in EU/EEA ports, reducing emissions from ships at berth.

To navigate these regulations, shipping companies must chart a course that includes submitting a FuelEU Monitoring Plan by August 2024. This plan should outline the methods for monitoring and reporting fuel consumption and GHG emissions. Plus, at the end of each year, companies would then have to submit a FuelEU Report detailing the recorded data for verification.

Innovative Mechanisms for Compliance

Thankfully, the regulation also introduces three novel concepts to aid compliance:

Banking: Surplus achievements in GHG intensity reduction can be carried forward to the next year for the same ship.

Borrowing: If a ship exceeds the GHG intensity limit, it can borrow from its expected performance the following year, with a 10% premium.

Pooling: Companies can offset higher emissions from one vessel with lower emissions from another within their fleet or through a collective pool, which can even include vessels from other companies.

Penalties on Non-compliance

Like most regulations, non-compliance comes with a cost. Companies which exceed their GHG intensity limits or fail to use OPS must pay penalties. The penalty is €2,400 per tonne VLSFO energy equivalent, or about €58.50 per GJ of non-compliant energy use. The penalty for not complying with the shore power requirements is €1.50 per kWh of the established total electrical power demand of the ship at berth multiplied by hours at berth. Once these fines are settled, they will receive a FuelEU Document of Compliance, affirming their adherence to the regulations.

The Voyage Ahead

As the maritime sector prepares to hoist the sails of sustainability, the FuelEU Maritime regulations stand as a testament to the EU’s commitment to a greener future. With a focus on reducing emissions and promoting cleaner energy, the maritime industry is on course for an eco-friendly transformation, setting a global example for environmental stewardship on the high seas.

Fortunately, the strict regulation also provides the three mechanisms as tools to help vessels comply and meet the new standards.

Interested in diving deeper into how exactly to use the three mechanisms the best to ensure your fleet’s FuelEU compliance?

Talk to our expert.