As per 2025, FuelEU applies to all commercial vessels of 5.000 GT and above regardless of flag. FuelEU Maritime sets strict fuel reduction targets in combination with penalties on fuel combustion. Non-compliance to intensity targets will result in penalties in the hundreds of thousands of euros. Mitigation means the use of alternative fuels, shore power and zero-emission technologies. Use the FuelEU Quickscan to determine your penalty and possible mitigation measures.

FuelEU Maritime in a nutshell

FuelEU Maritime is an EU mandated regulation that applies to all ships of above 5,000 gross tonnage that serve the purpose of transporting passengers or cargo for commercial purposes, regardless of their flag, arriving at or departing from EU/EEA ports. The goal of FuelEU Maritime is to reduce greenhouse gas (GHG) emissions of ships when travelling to, from or within the EU. Broadly speaking FuelEU Maritime requirements consist of:

Provisions setting a limit of GHG intensity [gCO2 eq / MJ] of energy used on board. From 2025 onwards, shipping companies subject to FuelEU need to calculate emissions per unit of energy used on board, based on their reported fuel consumption and the emissions factors of their respective fuels.
Provisions mandating the use of shore power (onshore power supply / OPS) or zero-emission technology in port for containerships and passenger ships while moored while in EU/EEA port from 2030 onwards.

FuelEU Maritime puts the responsibility for compliance on the shipping company. Ships subject to FuelEU Maritime are required to monitor fuel consumption, data and voyage information as per their FuelEU Monitoring and Reporting Plan. The shipowner is required to report this information each year to an accredited verifier as per their FuelEU Report. Data collected by EU MRV Regulations is to be used when carrying out FuelEU Maritime calculations and reporting. The verifier calculates greenhouse gas (GHG) intensity for the reporting year, determines (non-)compliance to the regulation and calculates penalties.

Failure to comply with the regulations means a shipping company exceeds the GHG intensity limits. In this case the shipping company is obliged to pay a penalty for the excess. The GHG intensity limit will be strengthened every five years: 2% as of 2025, 6% as of 2030, 14.5% as of 2035, 31% as of 2040, 62% as of 2045 and 80% as of 2050 in comparison to a reference value of 91.16 [gCO2eq/MJ].

FuelEU Maritime in depth

GHG Intensity requirements
- Shipowner is required to make a FuelEU Monitoring Plan.
- Shipowner is required to report yearly data to verifier in FuelEU Report.
- Calculation and approval is performed by verifier or Recognized Organization (RO).
- GHG intensity limit is strengthened every five years, from 2% in 2025 to 80% in 2050.
- Shipowner can ‘pool’ ships, ‘bank’ or ‘borrow’ budget in order to mitigate penalties.
Shore Power requirements
- Containerships and passenger ships are required to connect to shore power.
FuelEU Monitoring and Reporting Plan requirements
- In accordance with the framework of reporting under EU MRV.
- Ship type, name, IMO number, shipowner and information of the shipping company.
- Sources of energy used on board while in navigation and at berth.
- Procedures for monitoring the fuel consumption of each fuel type.
- Procedures for monitoring departure and arrival ports, including date and time.
- Procedures for monitoring Well to Tank and Tank to Wake emission factors of energy.
- Standards and characteristics of shore power or a zero-emissions technology.
- Value of the established total electrical power demand of the ship at berth.
- Shall be updated and assessed by verifier as appropriate .
FuelEU Report requirements
- Departure and arrival ports, including date and time.
- Amount of fuel used while at berth and at sea.
- Amount of electricity supplied to the ship using shore power (OPS).
Verifier requirements
- Calculate yearly average GHG intensity of the energy used on board.
- Calculate GHG intensity emissions and balance, including RFNBO usage.
- Calculate number of non-compliant port calls for the use of shore power (OPS).
FuelEU Maritime applies to all ships of above 5,000 gross tonnage that serve the purpose of transporting passengers or cargo for commercial purposes, regardless of their flag, arriving at or departing from EU/EEA ports from 2025 onwards. Shore power (OPS) requirements apply to containerships and passenger ships in AFIR ports from 2030.
The requirements would apply to the energy used during the stay within a port in the EU, the energy used on voyages between two EU ports, half of energy used on voyages departing from or arriving in ports located in EU outermost regions and half of energy used on voyages between an EU port and a third-country port.
GHG intensity
- All ships of above 5,000 GT regardless of flag in EU.
- January 1st 2025 onwards.
Shore power
- Containerships and passenger ships over 5,000 GT.
- January 1st 2030 onwards for AFIR ports.
Exemptions are subject to verification by the competent authority (verifier) of the member state of the port of call or any duly authorized entity, after consulting relevant entities where appropriate.
GHG intensity exemptions
- Warships, naval auxiliaries, fish-catching or fish-processing ships, wooden ships of a primitive build, ships not propelled by mechanical means, or government ships used for non-commercial purposes are exempt.
- For voyages departing from or arriving at non-EU ports or ports in outermost regions of the Union, 50% of fuel onboard is used in calculations.
- GHG intensity of Renewable Fuels of Non-Biological Origin (RFNBO) are halved (see calculations). This measure applies until the 31st December 2033.
- Ships having ice class IC, IB, IA, IA Super or equivalent may exclude additional energy consumption due to sailing in ice conditions until the 31st of December 2034.
- Certain voyages between member state ports and ports of the same member state located in an island with fewer than 200,000 permanent residents are exempt.
- Member states may exempt voyages between a port of call located in an outermost region and another port of call located in an outermost region.
Shore power exemptions
- Shore power only applies to containerships and passenger ships.
- Non-AFIR ports start from 1st January 2035.
- Port calls less than 2 hours are excluded.
- Ships using zero-emission technologies when moored are excluded.
- Unscheduled calls for safety or saving life at sea are excluded.
- Exceptional risk to grid stability or emergency situations are excluded.
- Unavailability to connect to a shore power connection in port.
- Ships that require the use of onboard power generation for maintenance or functional testing for survey or inspection.
FuelEU Maritime calculations consist of GHG intensity and penalties. The full formula for GHG Intensity calculation can be found in Annex I of the regulation. The full formula for penalties calculation can be found in Annex IV of the regulation. Well to Tank (WtT), Lower Calorific Values (LCV) and assumptions for biofuels and RFNBOs are crucial in determining the correct values for GHG intensity and penalties. Always check with your verifier to ensure the right numbers are used. Check the guide chapter 2 for detailed elaboration on FuelEU Maritime calculations.
GHG Intensity calculation
GHG intensity of a ship is calculated by summing the Well to Tank emissions of the fuels used onboard (WtT) with the Tank to Wake emissions of the fuels used (TtW). This is multiplied by a reward factor from to wind-assisted propulsion, if installed on board.
The GHG intensity unit is “grams of CO2 equivalent per MJ energy used on board”. Greenhouse gasses (GHGs) covered by FuelEU Maritime are carbon dioxide (CO2) methane (CH4) and nitrous oxide (N2O). The emissions from these different GHGs are converted into CO2 equivalent emissions for each type of fuel used on board. The sum of these parts is the total GHG intensity of the ship. GHG intensity is thus independent of fuel consumption in case only a single fuel is used, and a weighted average in case multiple fuels are used.
Penalties calculation
The principles of FuelEU penalties are laid down in article 23(2) of the FuelEU Maritime regulation. The calculation and formulas of said penalties and compliance balance are provided in Annex IV.
The FuelEU Maritime penalty consists of a penalty for the GHG intensity, an RFNBO subtarget and a shore power penalty for non-compliant port calls. After payment, a company is compliant with FuelEU regulation.
If the actual GHG intensity of the ship exceeds the GHG target of the reporting year as validated by verifier, a penalty is imposed on the shipping company. This penalty is calculated by dividing the absolute ‘compliance balance’ by the actual GHG intensity, multiplied by a penalty factor. The compliance balance is derived by taking the difference between the actual GHG intensity and the GHG intensity target, multiplied by the amount of energy used on board of the ship. Combining these to formulas leads to a simplified formula for calculating FuelEU penalties, shown in the guide.
If a ship has a compliance deficit for two consecutive reporting periods or more, that amount shall be multiplied by 1 + (n -1)/10, where n is the number of consecutive reporting periods for which the company is subject to a FuelEU penalty for that ship.
Compliancy to FuelEU Maritime means (1) ship GHG intensity actual is lower than GHG intensity target of the reporting year or (2) payment of penalties.
Non-compliancy to FuelEU Maritime means that your ship GHG intensity actual is higher than the GHG intensity target of the reporting year. In this case the shipping company, manager or bareboat charterer who has assumed responsibility for the operation of the ship from the shipowner, is obliged to pay a penalty for the excess. The company shall remain responsible for the payment of FuelEU penalties, without prejudice to any contractual agreements with commercial operators of the ship or client. After payment, the company is deemed to comply with the regulation.
For the containership benchmark used in the guide, the yearly penalties in a business as usual scenario will increase dramatically over time. Starting at €802,008, penalties rise to millions of euros from 2030 onwards due to an increase in reduction factor as well as the penalty multiplier for multiple years of compliance balance deficit.
Mitigation options to reduce these costs include refits, fuel change, banking, borrowing and pooling.
Refits
Refits that prevent the combustion of speed for the same output of work, effectively improve your greenhouse gas intensity rating and will thus reduce penalties. The Decarbonizer can be used freely to determine the impact for several types of refits on your vessel.
The most important options for any vessel, in particular containership and passenger ships, are arguably shore power and wind-assisted propulsion, as these will result in additional benefits when calculating GHG intensity. These two are elaborated upon in the guide.
Fuel change
Apart from more standard refits to improve fuel efficiency, the most impacting measure to reduce GHG intensity and avoid penalties is to change your fuel. The FuelEU Maritime regulations lists approx. 32 different fuels (or pathways), with three distinct fuel types: fossil, biofuels and RFNBO (Renewable Fuels of Non-Biological Origin).
Each of these types of fuels will ensure compliance until a certain timeframe. For example, the use of HFO and MDO will generally result in a penalty as per 2025, LNG not until 2035. Pending on the specific pathway , penalties can be avoided until 2040 or beyond.
Figure 6 highlight the most important fuels and their estimated GHG intensity. Table 4 shows which fuels ‘should last’ until which year, i.e. should lead to a GHG intensity lower than GHG intensity target. These tables should provide guidance for determining which fuel is compliant to the FuelEU regulation the longest. For a complete table of timeframes for all different fuel types, refer to Appendix 5.5 of the guide. It should be noted that:
- For biofuels and RFNBOs, multiple pathways are available which do not always have to impact GHG intensity positively, see section 2.3 of the.guide
- Except for biofuels, most fuels will incur a CAPEX cost when a vessel is refitted to accommodate this type of fuel (engine refit, piping, tanks, etc.). This is included in the Decarbonizer for several general types of fuels.
- To promote the use of renewable fuels of non-biological origin (RFNBOs), FuelEU includes a 'multiplier' to be used when calculating the GHG intensity, in effect allowing the energy from RFNBOs to count twice, which makes RFNBOs highly attractive until the multiplier is adjusted (not expected before 2031).
Banking
Banking refers to the ability of a company to carry forward a compliance surplus to the following reporting period in order to offset future compliance deficits. It allows companies to strategically manage their compliance and avoid penalties for non-compliance in a particular year. Once the FuelEU document of compliance is issued, the company can no longer bank any surplus.
- Banking is specific to the individual ship's compliance balance and cannot be transferred to other ships within the company.
- Banking for two consecutive reporting periods is not allowed.
Borrowing
Pooling
Refits
Refits that prevent the combustion of speed for the same output of work, effectively improve your greenhouse gas intensity rating and will thus reduce penalties. The Decarbonizer can be used freely to determine the impact for several types of refits on your vessel.
The most important options for any vessel, in particular containership and passenger ships, are arguably shore power and wind-assisted propulsion, as these will result in additional benefits when calculating GHG intensity. These two are elaborated upon in the guide.
Fuel change
Apart from more standard refits to improve fuel efficiency, the most impacting measure to reduce GHG intensity and avoid penalties is to change your fuel. The FuelEU Maritime regulations lists approx. 32 different fuels (or pathways), with three distinct fuel types: fossil, biofuels and RFNBO (Renewable Fuels of Non-Biological Origin).
Each of these types of fuels will ensure compliance until a certain timeframe. For example, the use of HFO and MDO will generally result in a penalty as per 2025, LNG not until 2035. Pending on the specific pathway , penalties can be avoided until 2040 or beyond.
The guide highlights the most important fuels and their estimated GHG intensity. It shows which fuels ‘should last’ until which year, i.e. should lead to a GHG intensity lower than GHG intensity target. These tables should provide guidance for determining which fuel is compliant to the FuelEU regulation the longest. For a complete table of timeframes for all different fuel types, refer to Appendix 5.5 of the guide. It should be noted that:
- For biofuels and RFNBOs, multiple pathways are available which do not always have to impact GHG intensity positively, see section 2.3 of the guide.
- Except for biofuels, most fuels will incur a CAPEX cost when a vessel is refitted to accommodate this type of fuel (engine refit, piping, tanks, etc.). This is included in the Decarbonizer for several general types of fuels.
- To promote the use of renewable fuels of non-biological origin (RFNBOs), FuelEU includes a 'multiplier' to be used when calculating the GHG intensity, in effect allowing the energy from RFNBOs to count twice, which makes RFNBOs highly attractive until the multiplier is adjusted (not expected before 2031).
Banking
Banking refers to the ability of a company to carry forward a compliance surplus to the following reporting period in order to offset future compliance deficits. It allows companies to strategically manage their compliance and avoid penalties for non-compliance in a particular year. Once the FuelEU document of compliance is issued, the company can no longer bank any surplus.
- Banking is specific to the individual ship's compliance balance and cannot be transferred to other ships within the company.
- Banking for two consecutive reporting periods is not allowed.
Borrowing
Borrowing refers to the ability of a company to borrow an advance compliance surplus from the following reporting period if the ship has a compliance deficit for the current reporting period. This allows the company to offset the deficit by using a surplus from the next reporting period. The advance compliance surplus shall be added to the ship’s compliance balance in the current reporting period and the advance compliance surplus - multiplied by 1.1 - shall be subtracted from the same ship’s compliance balance in the following reporting period.
- Borrowing is not allowed when a ship is participating in a pool.
- Borrowing is specific to a single ship's compliance balance and cannot be transferred to other ships within the company.
- A compliance surplus may not be borrowed for two consecutive reporting periods.
- A compliance surplus may not exceed more than 2% of the intensity limit of the year, multiplied by the energy consumption of the ship.
Pooling
Pooling under FuelEU Maritime refers to the practice of combining the compliance balances of multiple ships to meet the regulations' requirements and incentivize investment in advanced technologies. It requires calculating compliance balances, registering ships' intentions to participate in a pool, and selecting a verifier. A pool is valid only if the total pooled compliance balance is positive, if ships which had a compliance deficit do not have a higher compliance deficit after the allocation of the pooled compliance, and if ships which had a compliance surplus do not have a compliance deficit after the allocation of the pooled compliance. Furthermore it should be noted that for the same reporting period:
- Borrowing is not allowed when pooling.
- Pooling can be set up by two or more shipping companies.
- A ship’s compliance balance may not be included in more than one pool.

Download Guide

FuelEU Maritime Pooling Tool

Determine your FuelEU pooling strategy and company fuel costs, EU ETS and FuelEU penalties

FuelEU Maritime Case Studies

Explore up to five case studies and determine the lowest fuel-strategy with the FuelEU Maritime Case Maker

Frequently Asked Questions

Use the Regulator to quickly find what your are looking for

FuelEU Maritime is part of the Fit for 55 package directed at shipping. A key proposal, FuelEU, aims to decarbonize the EU maritime sector by promoting low-carbon fuels and mandating the use of shore power in EU ports. Key points of the FuelEU Maritime regulation include:
- Greenhouse Gas (GHG) Limits: Starting in 2025, ships must reduce their GHG intensity progressively, with specific reduction targets set for every five years until 2050.
- Shore Power: Mandatory use of shore power in ports starts in 2030.
- GHG Emissions Scope: Emissions from CO2, CH4, and N2O are considered across the entire supply chain ('Well to Wake').
- Fuel Targets: By 2050, 86-88% of maritime fuels should be Renewable and Low-carbon Fuels (RLF) or Renewable Fuels from Non-Biological Origin (RFNBOs).
- Regulation Coverage: Applies to ships over 5,000 gross tonnage used for commercial purposes at EU/EEA ports, regardless of their flag.
- Compliance and Reporting: Shipping companies must monitor and report fuel consumption and voyage data annually. Compliance is assessed, and penalties can be mitigated through various means, including banking, borrowing, or pooling of compliance credits.
- Supporting Regulations: Production and distribution of fuels are covered by the Renewable Energy Directive (RED) and the Alternative Fuels Infrastructure Regulation (AFIR).
In summary, the FuelEU Maritime regulation is a comprehensive effort to reduce the carbon footprint of the EU maritime sector through stringent GHG limits, the adoption of renewable fuels, and the use of shore power, with robust compliance and reporting mechanisms in place.
The formula to calculate ‘GHG intensity’ as stated by the FuelEU Maritime is stated in Annex I of the regulation, and explained in detail in chapter 2.0 of the guide. In short:
GHG intensity of a ship is calculated by summing the Well to Tank emissions of the fuels used onboard (WtT) with the Tank to Wake emissions of the fuels used (TtW). This is multiplied by a reward factor from to wind-assisted propulsion, if installed on board.
The GHG intensity unit is “grams of CO2 equivalent per MJ energy used on board”. Greenhouse gasses (GHGs) covered by FuelEU Maritime are carbon dioxide (CO2) methane (CH4) and nitrous oxide (N2O). The emissions from these different GHGs are converted into CO2 equivalent emissions for each type of fuel used on board. The sum of these parts is the total GHG intensity of the ship. GHG intensity is thus independent of fuel consumption in case only a single fuel is used, and a weighted average in case multiple fuels are used.
FuelEU Maritime applies to all ships of above 5,000 gross tonnage that serve the purpose of transporting passengers or cargo for commercial purposes, regardless of their flag, arriving at or departing from EU/EEA ports.
The requirements would apply to the energy used during the stay within a port in the EU, the energy used on voyages between two EU ports, half of energy used on voyages departing from or arriving in ports located in EU outermost regions and half of energy used on voyages between an EU port and a third-country port.
GHG Intensity
- All ships of above 5,000 GT regardless of flag in EU.
- January 1st 2025 onwards.
Shore power
- Containerships and passenger ships over 5,000 GT.
- January 1st 2030 onwards for AFIR ports.
Exemptions are subject to verification by the competent authority (verifier) of the member state of the port of call or any duly authorized entity, after consulting relevant entities where appropriate.
Exempt ship types
Warships, naval auxiliaries, fish-catching or fish-processing ships, wooden ships of a primitive build, ships not propelled by mechanical means, or government ships used for non-commercial purposes are exempt.
More exemptions
- For voyages departing from or arriving at non-EU ports or ports in outermost regions of the Union, 50% of fuel onboard is used in calculations.
- GHG intensity of Renewable Fuels of Non-Biological Origin (RFNBO) are halved (see calculations). This measure applies until the 31st December 2033.
- Ships having ice class IC, IB, IA, IA Super or equivalent may exclude additional energy consumption due to sailing in ice conditions until the 31st of December 2034.
- Certain voyages between member state ports and ports of the same member state located in an island with fewer than 200,000 permanent residents are exempt.
- Member states may exempt voyages between a port of call located in an outermost region and another port of call located in an outermost region.
- Shore power only applies to containerships and passenger ships.
- Non-AFIR ports start from 1st January 2035.
- Port calls less than 2 hours are excluded.
- Ships using zero-emission technologies when moored are excluded .
- Unscheduled calls for safety or saving life at sea are excluded.
- Exceptional risk to grid stability or emergency situations are excluded.
- Unavailability to connect to a shore power connection in port.
- Ships that require the use of onboard power generation for maintenance or functional testing for survey or inspection.
Broadly speaking FuelEU Maritime requirements consist of:
(1) Provisions setting a limit of GHG intensity [gCO2 eq / MJ] of energy used on board. Shipping companies will need to calculate emissions per unit of energy used on board, based on their reported fuel consumption and the emissions factors of their respective fuels.
(2) Provisions mandating the use of shore power (onshore power supply / OPS) or zero-emission technology in port for containerships and passenger ships.
FuelEU Maritime puts the responsibility for compliance on the shipping company. Ships subject to FuelEU Maritime are required to monitor fuel consumption, data and voyage information as per their FuelEU Monitoring and Reporting Plan. The shipowner is required to report this information yearly to an accredited verifier as per their FuelEU Report. According to Annex I of the regulation, data collected by EU MRV Regulations is to be used when carrying out FuelEU Maritime calculations and reporting. The verifier calculates greenhouse gas (GHG) intensity for the reporting year, determines (non-) compliance to the regulation and calculates penalties. This process is repeated yearly as per the schedule shown below.
Failure to comply with the regulations means a shipping company exceeds the GHG intensity limits. In this case the shipping company is obliged to pay a penalty for the excess, after which the company is deemed to comply with the regulation.
Banking, borrowing and pooling provide flexibility for companies to balance out their compliance over time and avoid penalties for non-compliance in a particular year. More information and examples can be found in the guide.
Banking refers to the ability of a company to carry forward a compliance surplus to the following reporting period in order to offset future compliance deficits. It allows companies to strategically manage their compliance and avoid penalties for non-compliance in a particular year. Banking is specific to the individual ship's compliance balance and cannot be transferred or applied to other ships within the company. Banking for two consecutive reporting periods is not allowed. Once the FuelEU document of compliance is issued, the company can no longer bank any surplus.
Borrowing refers to the ability of a company to borrow an advance compliance surplus from the following reporting period if the ship has a compliance deficit for the current reporting period. This allows the company to offset the deficit by using a surplus from the next reporting period. The advance compliance surplus shall be added to the ship’s compliance balance in the current reporting period and the advance compliance surplus - multiplied by 1.1 - shall be subtracted from the same ship’s compliance balance in the following reporting period. A compliance surplus may not be borrowed for two consecutive reporting periods, or for an amount exceeding more than 2% of the intensity limit of the year, multiplied by the energy consumption of the ship. Borrowing is specific to a single ship's compliance balance and cannot be transferred to other ships within the company. Borrowing is not allowed when a ship is participating in a pool.
Pooling under FuelEU Maritime refers to the practice of combining the compliance balances of multiple ships to meet the regulations' requirements and incentivize investment in advanced technologies. It requires calculating compliance balances, registering ships' intentions to participate in a pool, and selecting a verifier. A pool is valid only if the total pooled compliance balance is positive, if ships which had a compliance deficit do not have a higher compliance deficit after the allocation of the pooled compliance, and if ships which had a compliance surplus do not have a compliance deficit after the allocation of the pooled compliance.
Containerships and passenger ships at berth in an EU/EEA port will be required to connect to an onshore power supply (OPS) as of January 1st, 2030 for AFIR ports.
Exemptions are subject to verification by the competent authority (verifier) of the member state of the port of call or any duly authorized entity, after consulting relevant entities where appropriate. These exemptions are outlined in the introductory articles of the FuelEU regulations, i.e. (5) ships that:
a) Are moored at the quayside for less than 2 hours, calculated on the basis of time of arrival and time of departure monitored and recorded in accordance with Article 15;
b) use zero-emission technologies which comply with the general requirements for such technologies provided for in Annex III and are listed and specified in the delegated and implementing acts adopted in accordance with paragraphs 6 and 7 of this Article, for all their electrical power demand at berth, while moored at the quayside;
c) due to unforeseen circumstances beyond the control of the ship, have to make an unscheduled port call, which is not made on a systematic basis, for reasons of safety or saving life at sea, other than those already excluded under article 3, point (10);
d) are unable to connect to OPS due to the unavailability of OPS connection points in a port;
e) are unable to connect to OPS because exceptionally the electrical grid stability is at risk, due to insufficient available shore-power to satisfy the ship’s required electrical power demand at berth;
f) are unable to connect to OPS because the shore installation at the port is not compatible with the onboard on-shore power equipment, provided that the installation for shore-connection on board the ship is certified in accordance with the technical specifications set out in annex II to Regulation (EU) 2023/1804 for the shore-connection systems of seagoing ships;
g) for a limited period of time, require the use of onboard energy generation, under emergency situations representing immediate risk to life, the ship or the environment or for other reasons of force majeure;
h) while remaining connected to OPS, for a period of time limited to what is strictly necessary, require the use of onboard energy generation for maintenance tests or for functional tests carried out at the request of an officer of a competent authority or the representative of a recognized organization (RO) undertaking a survey or inspection.
The principles of FuelEU penalties and the compliance balance of a ship are laid down in article 23(2) of the FuelEU Maritime regulation. The calculation and formulas of said penalties and compliance balance are provided in annex IV. In a nutshell, penalties can be calculated as follows.
The compliance balance per ship is calculated by multiplying the total amount of energy used in the reporting year with the difference of the GHG intensity target and actual achieved GHG intensity. In case of a negative balance, FuelEU penalties are determined by dividing the balance with the actual achieve GHG intensity times 41,000 and multiplying this with 2,400.
According to Article 23(2) of the FuelEU regulation, if a ship has a compliance deficit and the company fails to pay the penalty by the specified deadline for two or more consecutive reporting years, the competent authority of EU/EEA member state of the port of call becomes responsible that the company pays the penalty
If a company does not pay the penalty within the designated time, the competent authority may remove the FuelEU document of compliance for that ship from the FuelEU database. Because the FuelEU regulation does not explicitly describe the consequences beyond the removal of the Document of Compliance, enforcement may be based on existing instruments and could involve legal action or additional penalties. This could include a so-called expulsion order, in which every member state shall refuse entry of the ship which is subject to the expulsion order into any of its port until the company fulfills its obligations. Because there is no precedent for this legislation, it remains unclear at the time of writing.
The EU Commission will implement an electronic database to register the performance and compliance of each ship. Verifiers are responsible to calculate penalties and issue the documents of compliance.
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.
January 1st, 2025. The requirement of having a FuelEU Monitoring Plan will enter into effect on the 31st August 2024. The shore power requirement for containerships and passenger ships take into effect on the 1st of January 2030 for AFIR ports.
The regulation stresses that the revenues generated from FuelEU penalties are to be used to support the rapid deployment and use of renewable and low-carbon fuels in the maritime sector. How exactly this is done, is still uncertain.
Biofuels will need to fall under the Renewable Energy Directive (RED) in order to receive a bonus in GHG reduction calculation. In case the biofuels used on board are certified under RED, measured GHG intensity of the Well to Tank part of that biofuel can be used. In case the biofuels do not fall under RED and are not certified as such, they are considered to have the same emission factors as the least favourable fossil fuel pathway for that type of fuel. For the Tank to Wake part, measured values can also be used if they are certified by means of laboratory testing or direct emission measurements. When this is not the case, default values specified in RED should be used. More information on this topic is provided in the guide.
RFNBO stands for Renewable Fuels of Non-Biological Origin. These fuels are produced from renewable sources without using biological materials such as crops or biomass. RFNBO fuels are typically made using renewable electricity and carbon captured from non-biological sources. They have high sustainability potential, can significantly reduce carbon emissions, and offer a viable alternative to fossil fuels. The RFNBOs defined as per the FuelEU Maritime Regulation are:
- e-diesel
- e-DME
- e-LNG
- e-LPG
- e-methanol
- e-H2
- e-NH3
Article 5(3) states the incorporations of an ‘RFNBO subtarget’, which refers to the requirement for ships to use a certain percentage of Renewable Fuels of Non-Biological Origin (RFNBO) in their yearly energy usage on board. The subtarget states that if the share of RFNBO in the yearly energy used on board by ships is less than 1% for the reporting period of 2031, a subtarget of 2% shall apply for such fuels in the yearly energy used on board by a ship from 1 January 2034. This subtarget does not apply if the monitoring results available before 1 January 2033 demonstrate that the share of RFNBO is already more than 2%. If a ship has a compliance deficit for the subtarget for RFNBO as referred to in Article 5(3), the FuelEU penalty shall be calculated in accordance with the formula specified in Part B of Annex IV.
This is still unclear. The current regulation states that:
"In the event of technological progress concerning new GHG abatement technologies, such as onboard carbon capture, the Commission should assess the possibility to reflect, in the GHG intensity and compliance balance formulas set out in Annexes I and IV respectively, the contribution of such technologies to lowering the GHG direct emissions on board ships."
Most likely, the EU CCS Directive or other legislation would need to be followed in order to reduce GHG intensity. At this point in time however, this is speculation. Learn more about ship-based CCS here.
(2024 May) In the EU Parliament, a number of areas are under discussion, including:
- The need to clearly delineate between the authorities who verify fuel composition and the authorities in charge of levying fines.
- How responsibility will be split between owner and charterer.
- The role of LNG as a transitional fuel.
- The risks of making shore power mandatory in all situations.
- Problems of cost and competition.
The shipping industry has raised concerns about additional cost for maritime transportation. It remains to be seen if this price increase can be deferred to clients. Shipowners are also concerned that FuelEU Maritime is inconsistent with EU ETS. They have also cast doubt on the ambition level of the yearly targets.
In addition, 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.

Ask Regulator AI

References

EU - FuelEU Maritime Directive 2009/16/EC - COM(2021) 562 14.7.2021 2021/0210(COD)

EU - RED Directive 2018/2001 - on the promotion of the use of energy from renewable sources

EU - EU MRV Regulation 2015/757 - monitoring, reporting and verification

EU - EU Regulator 2022/996 - rules to verify sustainability and GHG saving criteria

EU - EU Regulation 2023/2449 - template for monitoring plan and emissions report

EU - FuelEU legislation in progress briefing

ClassNK - FuelEU FAQs

ECSA - FuelEU Maritime Workshop

CE Delft - Impact of FuelEU on Dutch Maritime Sector

You might also like

Regulations

ETD

The ETD is the principal taxing scheme used for fossil and low-carbon fuels in EU. Fossil fuels will be taxed more, and renewable low-carbon fuels will receive incentives, including shore power.

Read More →

RED

RED targets supply side - production - of fuels in the EU, aiming for a 40% energy share from renewable sources by 2030.

Read More →

AFIR

AFIR targets the supply side of marine infrastructure and fuels in the EU, mandating the use of low-carbon fuels and shore power by 2030.

Read More →

EU MRV

EU MRV is the CO2 reporting system in Europe, used for carbon tax determination. It is applicable to vessels of 5000 GT and above. It is expected to apply to 400 GT and above. Learn more about EU MRV here.

Read More →

FuelEU Maritime

FuelEU Maritime is one of the most stringent upcoming laws on maritime sustainability, enforcing strict fuel reduction targets in combination with penalties on fuel combustion and shore power obligations for container and passenger ships.

Read More →

EU ETS

EU ETS will serve as a carbon tax for the maritime industry. At current price level, it will increase fuel cost by at least €200 - €300 per mT fuel.

Read More →

FuelEU Maritime