The shipping industry faces total FuelEU penalties of €1.35Bn (US$1.50Bn) in 2025 unless there is a dramatic swing in technology deployment or the regulations are delayed, reports Riviera.
FuelEU Maritime Regulations
Shipowners, operators and charterers must plan now for the European Union’s FuelEU Maritime regulations, which come into force 1 January 2025.
These regulations follow on from the EU Emissions Trading System (EU ETS), forcing shipping companies to negotiate allowances and invest in alternative fuels or hybrid propulsion.
OceanScore launched its new planning, simulation and budgeting tool for optimising compliance with FuelEU from a commercial standpoint at the SMM exhibition in Hamburg, Germany.
The Germany-based company has calculated shipping would face total FuelEU penalties of €1.35Bn in 2025, based on data on trading patterns and fuel mix from 2022 for some 13,000 vessels over 5,000 gt that are liable to the regulation.
OceanScore’s Suite of FuelEU Solutions
Oceanscore’s FuelEU Planner is the first in a suite of solutions geared to supporting complex decision-making processes with the upcoming regulation. The next product is scheduled to be introduced before the end of this year and another early in Q2 2025.
This launch follows the introduction of ETS Manager, geared towards the EU ETS, launched in Q3 2023. FuelEU Planner is a web-based service to help shipping companies to evaluate the options for reducing greenhouse gas (GHG) intensity, vessel optimisation and managing the remaining compliance balances.
It is able to simulate different operational and investment decisions and compare these from a total-cost-of-ownership perspective.
Complex Compliance Decisions
“FuelEU adds another layer of regulatory complexity for the industry beyond the EU ETS as it entails difficult choices for shipping companies related to fuel selection and low-carbon technology investments, as well as managing compliance balances,” said OceanScore managing director Albrecht Grell.
He confirmed to Riviera that FuelEU Manager will be introduced to the shipping industry in December 2024 and FuelEU Marketplace in April 2025.
FuelEU Manager will track compliance balances and costs to the new regulations and will manage invoicing, optimise fuel choices for periods and voyages, provide total costs over a year, track budget adherence and provide 24/7 visibility of pooling options.
Oceanscore’s planned FuelEU Marketplace will help shipping companies find the best FuelEU pooling options, offer or find compliance balances, enable payment strategies and simulate the effects of different pooling options for whole-fleet compliance.
“FuelEU’s commercial impact differs significantly from the EU ETS based on the decisions taken by the shipping company – all the way to actually creating additional revenue and cost-saving opportunities,” said Mr Grell.
FuelEU’s Focus on Alternative Fuels
FuelEU is geared to promoting the uptake of alternative fuel technologies, and will require progressive reductions in the average well-to-wake GHG intensity of energy used by ships above 5,000 gt versus a 2020 baseline of 91.16 gCO2e per MJ, rising from 2% next year to 80% by 2050, with a penalty of €2,400 per tonne of very low sulphur fuel oil for non-compliance.
Oceanscore forecasts the current rapid uptake of biofuels will lead to a balanced compliance market, where compliance surpluses will balance compliance deficits, but this depends on fuel availability, which remains limited and not widely tested at sea.
FuelEU introduces new concepts such as banking, borrowing and pooling compliance surpluses or deficits, and different metrics such as well-to-wake and energy measurement in MJ, contributing to the complexity of decisions to be made but also to the opportunities made available through this regulation, said Mr Grell.
“It is important to not just see FuelEU as just another cost and administrative burden, but to understand and proactively manage the resulting opportunities,” he said. “Our planner supports the needed simulations and facilitates the necessary alignment between the different stakeholders in shipping.”
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Source: Riviera
