Beginning January 1, 2025, ships calling at European ports will be subject to the FuelEU Maritime regulation. This regulation aims to encourage the use of renewable and low-carbon fuels in the maritime sector to significantly reduce greenhouse gas emissions, reports AJOT.
Emissions Calculator
FuelEU Maritime is the latest regulation aimed at decarbonizing the shipping industry. However, the growing complexity and regional nature of these emissions regulations are creating challenges for the shipping sector. The sheer volume of new regulations, coupled with tightening goals and deadlines, demands reliable data and insights for informed decision-making. Moreover, these regulations may not always adequately address the unique characteristics of different trade routes or vessel types, leading to ambiguity and increased uncertainty for shipowners.
To effectively navigate FuelEU Maritime and understand its financial and commercial implications, shipowners require a clear market benchmark for assessing their emissions performance. This benchmark must be credible and sourced from a trusted authority within the industry. Baltic Exchange, with its Emissions Calculators, is well-positioned to provide this critical service.
“While the latest emissions regulations are a net positive for the industry, there is a degree of ambiguity around what constitutes strong commercial performance in this evolving landscape. It all gets very real when you put dollar numbers on the penalties and fuel alternatives. What is needed right now is a clearer understanding of the commercial implications of the various regulations and how these will affect the operational decisions of shipowners,” said Martin Crawford-Brunt, Emissions Lead at Baltic Exchange.
Valuable Insights
Baltic Exchange has launched an Emissions Calculator with a dedicated FuelEU Maritime feature to assist shipowners in understanding the financial implications of the new regulation. This tool allows shipowners, operators, and charterers to assess potential costs and ensure fair pricing by comparing a vessel’s performance against Baltic standard ships and routes.
The calculator compares fuel costs for various options, including low-sulfur heavy fuel oil (VLSFO) and greener alternatives like LNG and methanol. By inputting vessel details like deadweight tonnage, type, speed, and fuel consumption, shipowners can quickly estimate potential FuelEU Maritime penalties for voyages involving EU port calls. This information can then be used to adjust freight costs or target time charter rates accordingly.
Currently, the calculator focuses on fossil-based alternatives, which are expected to be more readily available and competitively priced initially. Future updates will include biofuel blends for diesel and LNG, provided their well-to-wake emissions factors are known.
For instance, a 50,000-dwt MR tanker operating on the TC14 Baltic route (Houston to Amsterdam) can expect approximately $483,000 in fuel costs and a FuelEU Maritime penalty of $29,400 in 2025, assuming VLSFO prices at $600/tonne and marine gasoil (MGO) at $700/tonne.
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Source: AJOT
