FuelEU Maritime

FuelEU Maritime is a European Union (EU) regulation aimed at significantly reducing greenhouse gas (GHG) emissions from the shipping industry. It mandates a gradual decrease in the GHG intensity of fuels used by ships operating in EU ports. This regulation is part of the EU’s broader commitment to climate neutrality by 2050 and is set to be implemented starting from January 1, 2025.

Unlike the EU Emissions Trading System (EU ETS) which targets overall CO2 emissions, FuelEU focuses specifically on the environmental performance of the fuel itself. This means that simply improving energy efficiency is not enough to comply with the regulation.

How do Ship Owners Comply to FuelEU?

Complying with FuelEU Maritime demands a comprehensive strategy encompassing various operational and technological adjustments. Ship owners must consider the following key areas:

• Reduce GHG Intensity: The core obligation is to lower the GHG emissions per unit of energy consumed by their vessels. This involves using fuels with lower carbon footprints.
• Embrace Renewable and Low-Carbon Fuels: Increasing the proportion of renewable fuels like biofuels and e-fuels in the fuel mix is crucial.
• Utilize Onshore Power Supply (OPS): Larger passenger and container ships must connect to OPS when available in EU ports to reduce emissions while docked.
• Monitor and Report: Accurate tracking of fuel consumption, GHG emissions, and fuel types is essential for compliance and reporting to authorities.
• Paying Penalties: Penalties are calculated based on the amount of non-compliant fuel used.
• Flexibility Mechanisms: Ship owners can explore options like pooling, banking, and borrowing of GHG intensity targets to manage compliance challenges:

• • Pooling: If there is a surplus or an excess on a ship’s GHG intensity targets, it can be pooled to be exchanged and compensated for other non-compliant ships within a single company or across companies.
  • Banking: The surplus can be banked to meet the following year’s intensity target for the same vessel.
  • Borrowing: Allows a company to borrow a future year’s anticipated surplus to meet the current year’s target instead, along with a borrowing penalty for that year’s target period.

FuelEU Maritime Timeline and Key Considerations

The FuelEU regulation introduces a progressive and ambitious timeline for reducing GHG emissions from the shipping industry. Ship owners must carefully plan their compliance strategies to meet these escalating targets. This phased approach allows the industry to adapt and invest gradually while driving towards a low-carbon future. Every 5 years from 2025 to 2050 this reference value will be reduced as follows:

• By 2% from 2025
• By 6% from 2030
• By 14.5% from 2035
• By 31% from 2040
• By 62% from 2045
• By 80% from 2050

The Role of Ship Managers in Navigating FuelEU Maritime

Ship managers play a pivotal role in assisting ship owners in navigating the complexities of FuelEU Maritime. Their expertise in vessel operations, technical management, and regulatory compliance can be invaluable in ensuring adherence to the regulation. Some of the key roles of Ship Managers are:

• Compliance Strategy Development:  Ship managers can assist ship owners to develop tailored compliance strategies, considering factors such as fleet composition, trade routes, and financial capabilities.
• Data Management and Reporting: Implementing robust data collection and reporting systems is crucial for FuelEU compliance. Ship managers can oversee these processes, ensuring accuracy and timely submission of required data.
• Technical Expertise: Ship managers possess the technical knowledge to evaluate and implement new technologies and operational measures to reduce GHG emissions. They can assist in assessing the suitability of alternative fuels, propulsion systems, and energy-saving devices.
• Crew Training: Developing and delivering training programs to educate crew members about FuelEU requirements, fuel handling procedures, and energy-saving practices is essential.
• Relationship Management: Ship managers have strong relationships with port authorities, classification societies, and other stakeholders to ensure smooth compliance and access to necessary support.

As a leading ship manager, we provide comprehensive services above to help you navigate the complexities of FuelEU.

Trading of Surplus / Deficit in Compliance Balance

We are proud to collaborate with Hecla Emissions Management, a joint venture between Wilhelmsen Ship Management and Affinity Shipping LLP. Hecla leads the way with its innovative FuelEU Maritime Exchange (FME) platform, the dedicated marketplace for assigning and trading FuelEU Maritime compliance balances. This pioneering initiative incentivizes companies that exceed their FuelEU compliance targets by allowing them to trade their surplus compliance balances. For more information, visit: https://www.hecla-em.com/fueleu-maritime