- As part of the 2050 climate strategy, the EU aims to promote the usage of alternative fuels at sea with a new regulation, FuelEU Maritime, which will enter into force in January 2025.
- The regulation applies to all larger ships operating in the EU area and sets a requirement to reduce the greenhouse gas (GHG) intensity of ships’ fuel.
- For the first five years the required reduction is only 2 percent but it will increase every five years.
Starting in 2025, the average well-to-wake (WtW) greenhouse gas (GHG) intensity of energy onboard ships going between EU ports must be capped at 89.34 grams of carbon dioxide-equivalent per megajoule of energy (gCO2e/MJ). That is a 2% reduction from a 2020 baseline of 91.16 gCO2e/MJ. And while the reduction may seem small initially, as the years progress, meeting this goal will require significant operational and technological shifts. The threshold will gradually be lowered after 2030, reaching a final target of 18.23 gCO2e/MJ (80% reduction) by 2050, reports Engine.
Choosing the right fuel
Choosing the right fuel is one of the most critical decisions shipowners must make. Installing equipment on ships to make them more energy efficient can cut their fuel consumption, but if they consume fuel oil or gasoil, they will still not be compliant with FuelEU Maritime.
Burning fuels with lower GHG intensities such as biofuels or LNG with low methane slip, on the other hand, can make them compliant. Only some shipowners will have a direct choice between conventional fuels, LNG and bio-blends, as purpose-made engines are needed to consume LNG.
Some LNG-fuelled vessels can also generate compliance surpluses in the initial years, but the amount will depend on the methane slips of different LNG engine types, which significantly influence compliance calculations.
It’s important to note that FuelEU Maritime is not about being compliant on individual voyages to EU ports, or even on individual vessels. It’s the average GHG intensity across pools of vessels sailing to EU ports throughout the year that determines the compliance balance. To get the balance right, shipowners can blend varying ratios of biofuel into their conventional fuels, or consume pure B100 biofuel and generate a compliance surplus to redistribute within a fleet of ships or sell on to other shipowners.
ENGINE calculations reveal that shipowners can earn a compliance surplus value of up to $546/mt by using varying ratios of bio-blends, with a higher B100 (100% biofuel) generating the maximum surplus. This value is theoretical and assumes that the shipowner can sell its compliance surplus to VLSFO-consuming vessels at a value equal to the total cost of blending just enough biofuel to be compliant over the cost of VLSFO.
In addition to fuel options, adopting wind-assisted propulsion technology can provide financial rewards under FuelEU Maritime. Ships equipped with this technology can earn reward factors, which are based on the vessel’s speed and the power generated by the wind technology.
Onshore power supply
Onshore power supply (OPS) is another compliance option. While it’s voluntary until 2030, it offers a pathway for reducing fuel consumption when ships are docked. OPS will become mandatory post-2030 but adopting it early could lead to surplus earnings. For instance, one compliance calculation platform shows that using 15 kWh of shore power could result in a potential surplus of €3.09/mtVLSFOe ($3.24/mtVLSFOe).
A reporting period runs from 1 January to 31 December each calendar year. The Korean Register informed ENGINE that emissions data for voyages spanning two calendar years should be allocated to the appropriate reporting periods. And finally, non-compliance will incur a penalty of €2,400 mt/VLSFO-equivalent ($2,521/mtVLSFOe) from 2025.
In other news this week, Chinese marine tech firm Headway Technology will provide an ammonia fuel supply system for Yuchai Marine’s ammonia-fuelled low-speed marine engine test platform. Yuchai Marine focuses is developing ammonia marine engines for multiple vessel segments including bulk carriers, container ships, tankers and engineering ships.
The Singapore-based Global Centre for Maritime Decarbonisation (GCMD) and marine fuel testing firm VPS have developed a technique to check the types and sustainability profiles of feedstocks going into fatty acid methyl ester- (FAME) based biofuels. They say the test method can be used for all FAME-based biofuels up to B100.
French industrial gas supplier Air Liquide secured a grant from the European Commission (EC) for its project to produce and supply hydrogen at the Port of Antwerp-Bruges in Belgium. Air Liquide will develop and operate a large-scale ammonia cracking plant and a hydrogen liquefier in a first-of-its-kind project in Europe.
Did you Subscribe to our daily newsletter?
It’s Free Click here to Subscribe!
Source: Engine
