FuelEU maritime regulation to be finalised by mid 2023?

What are the main requirements of the new FuelEU Maritime Regulation?

From 1 January 2030, containerships and passenger ships (i.e., ships carrying more than 12 passengers, including cruise ships, high speed passenger crafts, and ro-ro passenger ships) of 5.000 GT and above – irrespective of their flag – at berth in EU ports shall connect to on-shore power supply (OPS) and use it for all energy needs unless they:

are at berth less than 2 hours;
use a zero-emission technology in port;
have to make an unscheduled port call for reasons of safety or saving life at sea;
are unable to connect to OPS due to unavailable/incompatible connection points in the port.

For each port where the ship does not comply with OPS requirement, the Company shall pay a penalty whose amount is still to be clarified.

From 2025, each ship of 5.000 GT and above – irrespective of the flag – shall calculate its yearly average GHG intensity of the energy used on-board (i.e., GHGI_actual) in respect to:

100% of the energy used on voyages between EU ports and during their stay within a EU port;
50% of the energy used on voyages to or from EU ports, departing from or arriving at non-EU ports.

The GHGI_actual is calculated as the emissions of GHG (i.e., CO2, CH4, and N2O) produced by the ship considering both the Well-to-Tank upstream emissions released during the extraction, refining, transport of the fuel, and the Tank-to-Wake downstream emissions produced on board; divided by the energy used by the ship during the year.

The ship’s GHGI_actual is to be below the target value (GHGItarget), which will be reduced over the years from 2% in 2025 up to 80% in 2050, in order to achieve the EU ambitious climate target of carbon neutrality by 2050.

If the ship’s GHGI_actuall is below the target, the ship is compliant (surplus), thus a FuelEU Certificate of Compliance is issued and kept onboard. The validity of the FuelEU Certificate is 18 months.

If the ship’s GHGI_actuall is above that target, the ship is not compliant (deficit) and the Company shall pay a penalty. Only after the payment, the FuelEU Certificate can be issued.

To facilitate the compliance, the regulation includes the possibility to bank the compliance surplus or borrow ship’s compliance surplus between two reporting periods; and make a pool between two or more ships, even of different Companies.

What is the purpose of the new FuelEU Maritime Regulation?

The main purpose of this new Regulation is to incentivize the use of alternative fuel, thus the use of conventional fuel results in a deficit of compliance with the consequent payment of the penalty.

This is confirmed also from the studies on cruise ships and tankers of GT between 6500 and 26000 using fossil fuel (i.e., MGO, HFO and LNG) carried out by RINA based on the available draft text of the Regulation.

According to such studies, the compliance changes in case a percentage of biofuel is used. In fact, the use of biofuel makes the ship compliant even though an ever-increasing percentage of biofuel is to be used to comply with the more stringent targets after 2035. Moreover, even though the use of biofuel represents a solution for compliance with the Regulation, additional considerations shall be done on each specific ship in order to evaluate the availability of the biofuel, its costs and its use onboard.