OceanScore’s Analysis Reveals €1.3 Billion FuelEU Maritime Penalty Impact

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The introduction of FuelEU Maritime regulations, effective January 1, 2025, will impose significant financial penalties on non-compliant shipping segments, focusing on reducing greenhouse gas (GHG) intensity. OceanScore estimates that the penalties will total €1.345 billion in 2025, impacting 13,000 vessels trading within the EU/EEA. The container segment will bear 29% of the costs, with passenger vessels facing the highest average penalties per vessel. To mitigate these costs, shipping companies must adopt comprehensive strategies, including pooling resources and improving emissions data monitoring. Despite the initial 2% GHG reduction target, future tightening of regulations will escalate costs, necessitating proactive compliance measures, reports Ajot.

FuelEU Maritime regulations

The FuelEU Maritime regulations, set to commence on January 1, 2025, aim to reduce greenhouse gas (GHG) intensity in the shipping industry, posing significant financial challenges for non-compliant segments. OceanScore’s analysis indicates that the total penalties for non-compliance will reach €1.345 billion in 2025, with vessels over 5000gt trading within and into the EU/EEA being affected. The regulations mandate a 2% reduction in GHG intensity relative to a 2020 baseline.

Key findings from OceanScore’s data analytics reveal that the container segment will face the highest burden, accounting for 29% of the penalties, followed by RoPax (14%), tankers (13%), and bulkers (13%). Penalties will be levied at €2400 per tonne of VLSFO-equivalent for failing to meet the reduction target. Passenger vessels will incur the highest average penalties per vessel annually, followed by RoPax and RoRo vessels.

Liabilities per vessel will vary widely, with some vessels in the passenger and RoPax segments facing penalties between €1.8 million and €2.5 million. The compliance surplus, mainly generated by LNG and LPG-fueled vessels, is estimated at €669 million, which could halve the net cost of penalties to €680 million if pooling strategies are employed. Pooling allows shipping companies to share compliance balances, reducing individual financial burdens.

However, as the GHG reduction targets increase to 6% by 2030 and 80% by 2050, FuelEU’s financial impact will escalate, necessitating proactive strategies from shipowners. These strategies include transitioning to cleaner fuels, utilizing onshore power, and managing compliance balances through pooling, banking, and borrowing. Companies must also establish reliable monitoring and reporting mechanisms and ensure sound administrative processes to handle the regulation’s complexities.

OceanScore emphasizes that while the initial compliance costs are lower compared to the EU Emissions Trading System (EU ETS), the long-term financial implications of FuelEU will be substantial. Shipping companies need to understand the regulation thoroughly and implement effective measures to mitigate its financial impact.

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Source: Ajot