The FuelEU Maritime Regulation aims to reduce greenhouse gas (GHG) emissions in the maritime sector, targeting a 6% reduction by 2030 and 80% by 2050. It mandates stricter emissions reporting and compliance with GHG intensity limits for ships operating to/from or within the EU, promoting cleaner fuels and innovative technologies to enhance sustainability, reports Battersea.
The Compliance Penalty
The FuelEU Maritime Regulation imposes a strict penalty for failing to meet GHG intensity targets. The penalty is set at €2400 per ton of Very Low Sulfur Fuel Oil (VLSFO) equivalent exceeding the limit. This penalty structure is designed to discourage a strategy of merely paying the penalty, ensuring it is commercially unattractive.
According to the FuelEU Maritime Regulation (EU) 2023/1805, the penalty is calculated based on the amount and cost of renewable and low-carbon fuels that should have been used to comply with the regulation.
The penalty is set at 2400€ per ton of VLSFO equivalent exceeding the limit, but what does that mean for a vessel in total?
How to Calculate FuelEU Maritime Penalties
Step 1: Calculate the GHG Intensity
Required Data:
- Fuel consumption per fuel type (in g fuel)
- Tank-to-Wake (TtW) emission factor per fuel type (in g CO2e / MJ)
- Well-to-Tank (WtT) emission factor per fuel type (in g CO2e / MJ)
- Lower Calorific Value (LCV) per fuel type (in MJ / g fuel)
- Electricity consumption (in MJ)
Equation:
Note: For LNG, RFNBOs, ice class, or wind propulsion, refer to Annex II of the FuelEU Maritime Regulation (EU) 2023/1805 for specific details.
Step 2: Calculate the Compliance Balance
Required Data:
- Actual GHG intensity (in g CO2e / MJ)
- Target GHG intensity (in g CO2e / MJ)
- Fuel consumption per fuel type (in g fuel)
- Lower Calorific Value (LCV) per fuel type (in MJ / g fuel)
- Electricity consumption (in MJ)
The lower calorific value can be found in Annex II of the FuelEU Maritime Regulation (EU) 2023/1805, the actual GHG intensity has been calculated under Step 1, and the target GHG intensity is 89.34 g CO2e / MJ as per Article 4(2) of the FuelEU Maritime Regulation (EU) 2023/1805.
Equation:
(Target GHG intensity – Actual GHG intensity) * (Fuel consumption * LCV + Electricity consumption)
Step 3: Calculate the Compliance Penalty
Required Data:
- Actual GHG intensity (in g CO2e / MJ)
- Compliance balance (in g CO2e)
The actual GHG intensity has been calculated under Step 1, the compliance balance has been calculated under Step 2.
Equation:
This step-wise approach helps calculate the FuelEU Maritime penalties and breaks down the complex equations in a more simple manner. Note that the above has been simplified to exclude the use of LNG, RFNBOs, wind propulsion, or an ice class. In case any of the above is relevant, please refer to the annexes of the FuelEU Maritime Regulation (EU) 2023/1805 for further information.
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Source: Battersea
