Blog Post
FuelEU Maritime Announcement
Amsterdam, NL, 10 September 2024—CarbonLeap, the leading independent organization for managing monetised carbon reductions in global transportation, today called on shipowners in compliance deficit to take urgent action if they want to take advantage of the cost-efficiencies created by vessel pooling for meeting FuelEUMaritime compliance targets for commercial vessels over 5,000 GT. Leaving it until close to the compliance date in early 2026 to join a pool could leave owners facing significant financial penalties. Having pooling contracts inplace before the FuelEU monitoring period starts in 2025 will enable owners to better plan for passing on costs to their customers and minimising compliance costs. Once FuelEU Maritime regulations are applied to vessels sailing between, to, or from EU ports in 2025, shipowners will face three options to ensure compliance:
- Pay a fine of €2,400 per tonne VLSFO energy equivalent.
-Invest in higher-cost alternative fuels and energy-efficient technologies.
- Take advantage of the FuelEU pooling mechanism to benefit from low-emissions by vessels that are overachieving on their compliance targets.
Owners need to get theircompliance strategy right or face serious consequences.
Compliance Options and Long-Term Strategies
Retrofitting vessels to lower energy consumption and emissions is the best long-term approach to FuelEUMaritime compliance while bunkering alternative fuels such as biofuels and LNG offers a short-term solution for the applicable compliance period. The pooling mechanism allows vessel owners with fleets with higher carbon emissions the opportunity to ensure compliance by paying to combine their fleet performance with an owner of a lower-emission, over-compliant vessel. Pooling also buys time; allowing for preparation and investment in order to meet the next compliance round and especially in preparation for the ramp-up of the 6% well-to-wake GHG intensity target in 2030. For tramp shippers, who may face difficulties in bunkering compliant fuels at the ports they visit, pooling can be especially beneficial.
Urgent Action Required for Cost-Effective Compliance Strategies
Shipowners struggling with carbon reduction should agree to vessel pooling contracts now if they want to benefit from the most cost-effective compliance strategies. Guido Levie,co-founder at CarbonLeap, said, "Failure to comply with FuelEU Maritime could create serious budget difficulties for the business of fleet owners, who could face hefty fines. This is why we are urging shipowners find out about pooling opportunities to ensure they have their vessels covered and avoid any unexpected costs. We have strong partnerships with owners seeking pooling solutions and buyers looking to provide decarbonising solutions. But it is a process that takes time to set up thus an owner should act now." A FuelEUMaritime compliance pool allows fleet owners to quickly achieve compliance while allowing owners who have invested to make vessels compliant to unlock cash flow through the sale of their emissions compliance surplus.
CarbonLeap's Role in Facilitating Compliance
Guido continued: "At CarbonLeap, our experience in environmental commodity trading, along with our network of FuelEU Maritime surplus partners with proven well-to-wake emissions performance, means that we can bring together the sellers, buyers, and verifiersto enable the transport sector to meet FuelEU Maritime compliance targets."CarbonLeap is working in collaboration with a leading verifier to develop a pool of highly compliant vessels and identify pool participants to share the cost of compliance with the vessel owners. Pool participants will benefit from the surplus compliance of the pool lead to ensure FuelEU Maritime compliance at the lowest cost, contributing to the overall goal of transport decarbonisation.
The Importance of Decarbonising the Transport Sector
Decarbonising transport is crucial not only for meeting regulatory requirements but also for addressing climate change effectively. The transport sector is a significant contributor to greenhouse gas emissions globally. By adopting low-carbon transport solutions and transitioning towards sustainable mobility practices—including electric vehicles (EVs) and active travel options—stakeholders can significantly reduce transport emissions. Investing in clean energy sources and enhancing energy efficiency within this sector will play a pivotal role in achieving net-zero emissions targets. The European Commission has set ambitious carbon reduction targets that necessitate immediate action from all stakeholders involved in transport operations. By embracing innovative technologies and sustainable infrastructure development, we can pave the way for a greener future while ensuring economic viability within the industry.
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