Hecla Emissions Management’s new Compliance Market Indicator (CMI), which provides a benchmark of compliance costs for shipowners and charterers rose over €50 per tonne CO2e between December and March

Hecla Emissions Management, a leading provider of emissions compliance management solutions to the shipping industry, announced that its Compliance Market Indicator has risen to an average of €470 per tonne CO2e in March, highlighting the rising costs of compliance.

The Hecla CMI provides a benchmark price for FuelEU Maritime surplus, providing shipowners and charterers with a transparent reference point for charterparty settlements.

Using weekly inputs reflecting real-world pricing and regulatory conditions, Hecla’s CMI is a new benchmark that values the FuelEU surplus between two scenarios; the most expensive, non-compliance approach, in which operators use fuel oil in their vessels and pay full EU ETS costs and FuelEU penalties; and the lowest possible cost approach, which would be achieved by blending the exact amount of biofuel to ensure compliance while minimising EU ETS costs. While the biofuels market remains somewhat illiquid, this lowest-cost approach is unrealistic for shipowners as, hopefully, is the high-risk non-compliance approach. The CMI is therefore valued at the exact midpoint between these approaches.

The increase in the CMI benchmark since the introduction of the FuelEU Maritime regulation reflects the increase in B30 biofuel costs and the widening spread between VLSFO and B30. The fluctuations in the CMI benchmark also highlight the importance of a compliance strategy that reduces exposure to short-term fuel price volatility.

The Compliance Market Indicator (CMI) is a valuable reference for vessel owners and charterers as they plan their pooling strategies in 2025 and aim to understand how best to settle agreements between deficit and surplus vessels. The ‘Hecla FuelEU Maritime Exchange’ allows vessel owners and charterers to tokenise surplus created on voyages of their vessels to create assets that can be traded in a transparent and efficient marketplace to monetise surplus compliance. Having a clear benchmark for negotiations will enable shipowners to negotiate efficient and effective compliance deals that suit all parties.

Hugo Wilson of Hecla Emissions Management, said, “We have launched our Compliance Market Indicator in response to the repeated calls for guidance from vessel owners on the fair value of surplus. It serves as a valuable and transparent reference point in what, for now, is still an embryonic market, ensuring that owners are better informed over the best compliance strategy for their vessels.

“The CMI shows a clear upwards trend over the first two months of 2025, despite week-to-week fluctuations. If this longer-term trend continues, there would be a clear benefit for owners of vessels facing FuelEU compliance costs to seek an early opportunity to lock in a compliance solution.”

The CMI is derived from weekly inputs that reflect real-world pricing and regulatory conditions. Measures included in the calculation of the indicator include VLSFO and B30 benchmark prices and the price of EUAs, as well as FX rates, and FuelEU penalties.