FuelEU Maritime – how to comply with regulations
These are the key dates, and the actions shipowners need to take:
- Within two months after first port of call in 2025: Submit the FuelEU Monitoring Plan (MP) to an accredited verifier, such as DNV. This plan should contain an assessment of every ship and provide key details on how emissions will be monitored and reported. Note that a change of verifier requires a re-assessment of the MP.
- By 31 January of each year: Provide the FuelEU report to the verifier. Should there be a change of company, a partial report should be verified within one month after the company transfer.
- By 31 March of each year: Verifier records compliant FuelEU report in FuelEU Maritime database. This should be a full-year FuelEU report.
- By 30 April of each year: Record advance compliance surplus or compliance banking and announce pooling intention in the FuelEU Maritime database. The Verifier records the composition of vessel pools and approves compliance balance.
- By 30 June of each year: Verifier issues FuelEU Document of Compliance. In the event of a penalty, the Document of Compliance is issued by the authorities after receipt of payment.
By following all these steps, you as a shipping company can be assured that you are in compliance with the FuelEU Maritime regulation.
Compliance balance (CB)
The CB reflects a ship’s measure of over or under-compliance regarding the limits for the yearly average GHG intensity of the energy used on board.
The CB is determined by calculating the difference between the GHG intensity target for the given reporting year and the ship’s actual GHG intensity of the energy used on board, and then multiplying that difference by the sum of total energy consumption from fuels and shore-side electricity within the scope of the FuelEU regulation.
The calculation formula:
Your options to achieve compliance with the FuelEU regulation, are to use:
- Sustainable biofuels
- Renewable fuels of non-biological origin (RFNBO) (e.g. e-methanol)
- Recycled carbon fuels (RCF)
- Fossil LNG/LPG
- Shore power
- Wind-assisted propulsion
- Flexibility mechanisms (see rules below)
Rules for applying flexibility mechanisms
Banking rules
A vessel with a positive compliance balance in a reporting period can bank all or part of its surplus for subsequent reporting periods in THETIS. Banking is ship-specific, so in subsequent years it can be used to offset deficits of the same vessel. However, surpluses banked from previous reporting periods can also be utilized in future compliance pools, as they are incorporated into the ACB calculations.
The surplus does not expire and follows the ship in case of a change of company. If it is not banked in that year, the not-banked portion is lost – as illustrated below:
Borrowing rules
If the CB is negative, the vessel can request in THETIS to borrow an Advance Compliance Surplus (ACS) from the following year (reporting period year N+1). The borrowed amount is limited to 2% of the GHG intensity target for the reporting period year N, multiplied by the ship’s total energy consumption. Additionally, the borrowed amount is subject to a 10% increase the following year. The company may not borrow only part of the deficit; it must either borrow the entire deficit or not borrow at all.
Borrowing cannot take place in two consecutive reporting periods and cannot be done simultaneously with pooling in the same reporting period. If a ship did not call at an EU [1] port during the reporting period, but had borrowed an ACS in the previous period, then the administering state must notify the company by 1 June of the verification period. The notification will include the FuelEU penalty amount that the ship initially avoided by borrowing the ACS. This amount is then multiplied by 1.1 to account for the borrowing interest, as illustrated below:
[1] Note: A ship with an advance compliance surplus (ACS) from a previous reporting period can participate in a pool.
Pooling rules
After the ACB has been calculated, ships can choose to enter a pool to reduce or offset their deficits or to allocate their surplus. For a vessel to be eligible to enter a pool:
- The ship must be within the scope of the FuelEU Maritime regulation
- The ship did not borrow compliance in the current verification period
- The ship is included in only one pool of CB for GHG intensity in one reporting period
- The ship has a valid FuelEU Document of Compliance from the most recent verification period
Two or more vessels, including from different companies, can join a pool and allocate the CB between them. The allocation principles:
- Ships which enter a pool with a deficit cannot have a higher deficit after allocation.
- Ships which enter a pool with a surplus cannot have a deficit after the allocation.
Regarding the allocation of compliance within a pool, ships may exit with a deficit if the overall pool compliance balance remains zero or positive. It is also possible to join a pool where all ships are already compliant, solely to redistribute surplus compliance among the vessels.
Pooling verification
After a company registers its pooling intention in the THETIS database, specifying the ships involved, the allocation of the total pool compliance balance, and the selected verifier. All participating companies (if more than one is involved) must then validate the pool set-up. Once this validation is complete, the pooling rules, such as ensuring a positive total compliance balance and proper allocation of surpluses and deficits, must then be verified by the verifier. If all regulatory conditions are fulfilled, the pool can be verified.
After the pool has been verified, each vessel exiting the pool still needs to have the CB verified.
Note: As mentioned earlier, if a vessel enters a pool and exits with a surplus, that surplus can then be banked. This scenario requires two separate verifications: pooling and banking.
Pay the penalty:
Penalties are imposed when a ship fails to meet a compliance balance of at least zero. When a penalty is payable, it progressively increases by 10% for each consecutive reporting period for which a penalty applies. The penalty is set at €2,400 per tonne of VLSFO energy equivalent, or approximately €58.54 per GJ of non-compliant energy use.
The calculation formula:
FuelEU Maritime flexibility mechanisms workflow
An interactive guide explaining the flexibility mechanism workflow: