The information provided on this page is based on the European Commission Proposal dated July 2021. Key elements are subject to change before the definitive measures are adopted.
The EU’s Fit for 55 package has been proposed to decarbonize the European economy in line with the EU Green Deal. It includes new and revised measures, some of which will now include the maritime sector for the first time.
FuelEU Maritime is part of the proposed Fit for 55 package directed at shipping. By reducing the greenhouse gas (GHG) intensity of ships’ energy when travelling to, from or within the EU, it aims to promote the use of renewable and low-carbon fuels (RLF).
RLF should represent 86-88% of the international maritime transportation fuel mix by 2050 to contribute to the EU’s targets. RLF production and distribution are addressed in the Renewable Energy Directive (RED) and the Alternative Fuels Infrastructure Directive (AFID) respectively. On the other hand, FuelEU Maritime aims to drive demand and mitigate competition between operators and ports during the fuel transition.
* Some vessels will be exempt, including:
January 2025: date from which FuelEU Maritime may apply if adopted, to allow the shipping sector to benefit from new technological breakthroughs
The yearly GHG limit under FuelEU Maritime will be based on the average onboard GHG intensity of the fleet in 2020 – to be determined by the EU Commission. The annual reduction targets will become more ambitious up to 2050 to reflect developments in low-carbon fuel technology and availability:
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As a goal-oriented measure, FuelEU Maritime will be neutral in terms of fuel preference.
Shipping companies will need to calculate GHG emissions per unit of energy used on board, based on their reported fuel consumption and the emissions factors of their respective fuels. Notably, FuelEU Maritime adopts a well-to-wake (WtW) approach to assessing a fuel’s emissions factor.
The emission intensity of biofuels and biogas, among others, will be determined using the RED Directive, whereas fossil fuels should be assessed using FuelEU Maritime’s default emission factors.
Passenger ferries and containerships at berth in an EU port will be required to connect to an onshore power supply (OPS) as of January 1, 2030. Exemptions will be allowed in certain emergency situations, or for ships at berth for under two hours.
The EU Commission will implement an electronic database to register the performance and compliance of each ship.
Shipping companies are responsible for monitoring the type and amount of energy used in operation and at berth. They must submit to verifiers a standardized emissions monitoring plan for each of their vessels by August 31, 2024. Their records must contain the WtW emissions factors for each type of fuel used at berth and at sea. At the end of April each year, shipping companies will need to submit their data, including that already reported for MRV regulation.
Verifiers will assess each monitoring plan and calculate the yearly average GHG intensity of a ship’s onboard energy, use of OPS, and its reflection of yearly targets. The verifier will issue a document of compliance, which must be kept onboard all ships calling at an EU port until the end of that reporting period.
FuelEU Maritime allows operators some flexibility: they can roll over or borrow excess compliance from one year to another, or pool compliance between multiple vessels. If a ship has a deficit of compliance units, its owner may obtain some in advance, though not for over 2% of the target, or over two consecutive reporting periods.
Ships that do not meet the required yearly limits will be subject to penalties. These will be calculated by the verifier according to the amount and cost of low-carbon fuel that should have been used to meet the requirements. The revenues this generates may fund the promotion of renewable and low-carbon fuels and help operators to meet their goals.
In the EU Parliament, a number of areas are under discussion, including:
The European Council adopted the General Approach. It includes:
The shipping industry has raised concerns about additional cost for the maritime transportation. It remains to be seen if this price increase can be deferred to clients. Ship owners are also concerned that FuelEU Maritime is inconsistent with EU ETS. They have also cast doubt on the ambition level of the yearly targets.
The IACS has noted that FuelEU verifiers will need to spread over an extensive network to be able to check intra- and extra-EU voyages. They will also need high levels of knowledge and seniority and have their impartiality attested to by accreditors.
The FuelEU Maritime update will impact shipping in EU waters not only in terms of fuel choices in the long term, but in operational costs in the short- to mid-term. Like all of Fit for 55, the final form of the FuelEU Maritime update has yet to be decided, though it will become clearer in the months ahead.
Bureau Veritas is on hand to help ship owners and operators make the necessary preparations for all aspects of Fit for 55. As the proposal is finalized, we will provide updated information and advice. To stay up to date with the latest developments on FuelEU Maritime and other Fit for 55 measures, subscribe to our newsletter.