Five things the maritime industry needs to know about “Fit for 55”

Bureau Veritas answers your key questions about the EU’s proposed “Fit for 55” legislative package and its impact on the maritime industry.

What does “Fit for 55” aim to do?

In short, the “Fit for 55” legislative proposals set out the way in which Europe will reach its emissions reduction target^[1]. It is a legislative package toward making Europe the first climate neutral continent by 2050, contributing to the European Green Deal.

Some of the proposed measures – FuelEU Maritime, the EU Emissions Trading System (EU ETS), the Renewable Energy Directive (RED), the Energy Taxation Directive (ETD) and the Alternative Fuels Infrastructure Regulation (AFIR) – impact the shipping industry. Their specific goals are to encourage the adoption of low-carbon fuels, and stimulate renewable energy demand and production.

What is a market-based measure?

Market-based measures (MBM) are economic measures used to incentivize a certain behavior and complete technical measures.

In “Fit for 55”, EU ETS is an MBM encouraging energy efficiency and the use of low-carbon fuels. Shipping companies will have to purchase carbon allowances to account for their emissions. Overall, this should ensure emissions reductions and incentivize the use of greener alternatives to fossil fuels.

How prepared are shipping companies and ports for “Fit for 55”?

While the proposals have yet to be finalized and adopted, there is a certain level of uncertainty for shipping companies and ports. Indeed, the timeframe for entry into force is unknown, although some proposals include a phase-in period to allow the industry time to integrate the legislation, once in force.  

There is also concern as to potential additional costs resulting from the new taxes, adapting vessel or purchasing alternative fuels. Who will ultimately cover these costs, and how they may impact the sector competitively, remains to be seen.

It should be noted that these proposals are neutral in terms of technologies to achieve decarbonization by 2050. This allows much-needed flexibility to shipping companies to make the best choices for their situation.

I’m not in the EU; do I need to know about “Fit for 55”?

Yes, it is a good idea to stay informed on the proposed measures impacting shipping for several reasons. Firstly, regardless of a vessel’s flag, emissions from voyages to or from an EU port should be counted to comply with the EU ETS and FuelEU Maritime.

Secondly, even if your vessels do not carry out operations within the new EU proposals’ scope, they may one day face similar regional or global regulations. While “Fit for 55” is currently the most comprehensive package of maritime decarbonization proposals out there, other countries and regions are developing their own measures. It also remains to be seen if the IMO will adopt similar measures.

Ultimately, staying informed as “Fit for 55” is discussed will be the greatest asset in making the right choices for your fleet once it is adopted.

We’re committed to providing maritime operators with the latest updates on “Fit for 55” as the proposed measures change and are finalized. You can consult a detailed overview of the measures in our dedicated section.

[1] A target of at least 55% net emission reductions by 2030 compared to 1990.