The FuelEU Maritime Regulation is a cornerstone of the European Union’s Fit for 55 package, aimed at significantly reducing greenhouse gas (GHG) emissions from the maritime sector. Effective from January 1, 2025, this regulation mandates that all commercial vessels exceeding 5,000 gross tonnages operating in EU waters progressively lower their GHG intensity, with specific targets set for every five years until 2050. The regulation employs a comprehensive well-to-wake approach, accounting for emissions throughout the entire fuel lifecycle, including extraction, production, and consumption.
To facilitate compliance with these stringent GHG intensity limits, the FuelEU Maritime Regulation introduces several flexibility mechanisms. These mechanisms are designed to provide the Shipowner or ISM company who has assumed responsibility on behalf of shipowner hereafter referred to as responsible entity, with the necessary tools to manage compliance, mitigate financial risks, and promote the adoption of renewable and low-carbon fuels, thereby supporting the EU’s broader climate objectives.
The banking mechanism allows responsible entities to carry forward compliance surpluses from one reporting period to the next, enabling strategic management of compliance balances.
A vessel which is running purely on RFNBOs – & consuming 8000 MT of e-diesel & 5500 MT of e-methanol in the year 2025.
Start of Banking: March 2026
End of Banking: No further banking after the issuance of the FuelEU Document of Compliance, deadline 30th June 2026.
The borrowing mechanism under the FuelEU Maritime Regulation allows responsible entities to offset compliance balance deficits by borrowing advance compliance surplus from the subsequent reporting period.
Limits
Example
A vessel consumed 7500 MT of MDO and 4000 MT of HFO in 2025.
Compliance Balance: – 781578200.00 [gCO2eq] = -781.57 tCO2eq
Compliance Balance Repayment = Balance borrowed x 1.1 = [gCO2eq]
Pooling enables shipping companies to exchange their compliance balances for either GHG Intensity or RFNBO, ensuring that their net compliance balance after pooling is positive, while also maintaining a positive net compliance balance for the pool.
The regulation establishes two distinct compliance pools: one for the RFNBO subtarget and another for the GHG intensity target, allowing companies to manage compliance strategically. Please note that RFNBO subtarget is only applicable from 2033 in case the industry is unable to achieve an average of 1% RFNBO usage across by 2032.
Total Pooled Compliance = ∑ (Individual Ship Compliance Balances)
Allocation: This allocation process allows ships that have achieved positive compliance balance to compensate for those that have compliance balance deficit, promoting a collaborative approach to compliance.
Example
Total Pooled Compliance: + 5640.43 tCO2eq
After Pooling Compliance Balance Allocation:
The shipping companies participating in a pool collectively select a verifier. All participating companies must agree upon this selection and register it in the FuelEU database. The verifier oversees the compliance verification process for the pooled ships.
Reference: Article 21 of the FuelEU Maritime Regulation outlines the requirements for pooling and compliance verification.
When multiple companies participate in a pool, they must agree on a single verifier to ensure consistent oversight of the compliance balances. The selected verifier will verify the allocation of compliance balances among all ships in the pool.
Reference: Article 21 of the FuelEU Maritime Regulation specifies the pooling conditions and the role of verifiers.
When a FuelEU Maritime Pool has a positive compliance balance, the surplus compliance can be allocated among the participating ships. This allocation is designed to allow ships that have over-performed (i.e., those with a compliance surplus) to compensate for those that have underperformed (i.e., those with a compliance deficit).
Yes, ships participating in a pool can bank any surplus compliance balance resulting from the pooling allocation for use in future reporting periods, provided they adhere to the banking rules.
Reference: Article 20 of the FuelEU Maritime Regulation describes the banking mechanism and its compatibility with pooling.
No, ships participating in a pool cannot borrow advance compliance surpluses. They must rely solely on the total pool compliance balance and its allocation.
Reference: Article 21 of the FuelEU Maritime Regulation clarifies that borrowing is not permitted for ships in a pooling arrangement.
If a ship is sold during the reporting year, the selling company must generate a partial emissions report up to the date of sale. The acquiring company assumes responsibility for the ship’s compliance for the remainder of the year. Any borrowed compliance balance remains the liability of the selling company.
Reference: Article 15 of the FuelEU Maritime Regulation outlines the responsibilities of companies in the event of a change in ownership.
Yes, the FuelEU Maritime Regulation provides comprehensive guidelines for pooling, verifier selection, and compliance management. Specific articles, such as Article 20 (Banking), Article 21 (Pooling), and Article 15 (Change of Ownership), detail the processes and requirements for compliance under the regulation.
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