FuelEU-FAQS

Are offshore vessels currently included in the FuelEU Maritime Regulation?

The regulation applies to all ships above 5,000 gross tonnage that serve the purpose of transporting passengers or cargo for commercial purposes. For the time being, offshore vessels are not covered under the FuelEU Maritime Regulation.

Will the FuelEU Maritime Regulation apply to European Economic Area (EEA) countries and ports (Iceland, Norway and Lichtenstein)?

The FuelEU Maritime Regulation is a text with EEA relevance, which means that, following incorporation into the EEA Agreement, the regulation will apply to EU member States and Iceland, Liechtenstein and Norway (except Svalbard).

What are the derogations with respect to the GHG intensity of the energy used on board?

• Until 31 December 2029, Member States may exclude specific routes and ports in respect of the energy used on voyages performed by passenger ships other than cruise passenger ships between a port of call under the jurisdiction of a Member State and a port of call under the jurisdiction of the same Member State, located in an island with less than 200,00 permanent residents and the energy used during their stay within a port of call of the corresponding island. The European Commission has already published the list of the islands the derogation applies to, with the Implementing Decision (EU) 2023/2895. 
• Until 31 December 2029, Member States may exclude the energy used on voyages between a port of call located in an outermost region and another port of call located in an outermost region, along with the energy used at berth within the ports of call of the corresponding outermost regions. 
• Until 31 December 2029, Member States that do not share a land border with any other Member State may exclude the energy used on voyages performed by passenger ships performing transnational voyages under the public service obligations to the ports of call of other Member States. These Member States are Greece and Cyprus, as per the Implementing Decision (EU) 2023/2895 and concerns the ports of Piraeus (Greece), Larnaca (Cyprus) and Limassol (Cyprus).

Are there any additional zero-emission requirements for the energy used at berth? Are there any conditions under which these requirements do not apply?

Yes, from 2035 passenger ships and containerships moored at the quayside in a port of call which is not considered a major EU port (not a Ten-T port), but the quay of that port is equipped with available OPS, the vessel shall connect to that OPS and cover all its electrical power demand at berth. 

The derogations from the requirement to connect to OPS are the following:

• The vessel is moored at the quayside for less than two hours;
• The vessel uses zero-emission technologies to cover their electrical power demand at berth; 
• Due to unforeseen circumstances beyond the control of the ship, the ship had to make an unscheduled port of call, for reasons of safety or saving life at sea;
• The vessel is unable to connect to OPS due to unavailability of OPS connection points in that port;
• The vessel is unable to connect to OPS due to high risk of electrical grid stability, due to insufficient available shore-power to satisfy the ship’s required electrical power demand at berth; 
• The vessel is unable to connect to OPS due to incompatibility of the shore’s installation at the port with the onboard on-shore power equipment, provided that the installation for shore-connection on board the ship is certified in accordance with the technical specifications set out in Annex II to Regulation (EU) 2023/1804 for the shore-connection systems on seagoing ships; 
• The vessel for a limited period of time, requires the use of onboard energy generation, under emergency situations representing immediate risk to life, the ship, or the environment or for other reasons of force majeure;
• The vessel while remaining connected to OPS, for a limited period of time to what is strictly necessary, requires the use of onboard energy generation for maintenance tests or for functional tests carried out at the request of an officer of a competent authority or the representative of a recognized organization undertaking a survey or an inspection.

How is the GHG intensity of the energy used on board calculated? 

The FuelEU Maritime Regulation evaluates the GHG intensity of the energy used on board on a Well-toWake (WtW) basis. The Well-to-Wake approach includes the upstream, or Well-to-Tank (WtT) emissions and the downstream or Tank-to-Wake (TtW) emissions. 

What are the Well-to-Tank or upstream emissions?

The WtT emissions include all the emissions that arise from the production of the fuel until the moment it is bunkered onto the ship. These include inter alia:

• Emissions from the extraction/acquisition of the feedstock to produce the fuel;
• Emissions from the processing/transformation of the feedstock; 
• Emissions from the transportation of the feedstock to the conversion site;
• Emissions from the conversion of the feedstock to product fuel;
• Emissions from the transportation/storage/delivery/retail storage and bunkering of the fuel.

What are the Tank-to-Wake or downstream emissions?

The TtW emissions arise during the combustion of the fuel. These include: 

• GHG emissions arising from the combustion and/or oxidation of the fuel used onboard;
• Fugitive emissions that escape between the tanks up to the energy converter that are leaked, vented, or otherwise lost; 
• Slip emissions that escape from the energy converter without being oxidized.

How are the Well-to-Tank emissions calculated?

Annex II of the FuelEU Maritime Regulation contains default WtT emission factors for fossil fuels, biofuels and RFNBOs. Companies shall not diverge from the default values for fossil fuels. For biofuel, biogas, RFNBOs and Recycled Carbon Fuels (RCFs) companies are entitled to diverge provided that actual values are certified under a scheme that is recognized by the EU Commission.

How are the Tank-to-Wake emissions calculated?

Annex II of the FuelEU Maritime Regulation contains default TtW emission factors for fossil fuels, biofuels and RFNBOs. Companies shall be entitled to diverge from the default TtW emission factors – apart from the TtW CO2 emission factors for fossil fuels – provided that actual values are certified by means of laboratory testing or direct emissions measurements. The EU Commission shall adopt implementing acts to specify which international standards and certification references are accepted for demonstration of actual TtW emission factors.

How is the GHG intensity of the fuels calculated and reported?

The GHG intensity of the fuels is calculated on a WtW basis as the sum of WtT and TtW. For fossil fuels, Companies must use the default WtT values contained in Annex II of the FuelEU Maritime Regulation (Regulation (EU) 2023/1805). Biofuels and RFNBOs can calculate their WtT based on the following formula, where E is the emissions savings term, contained in the Proof of Sustainability (PoS) and CF is the carbon factor of the fuel, whereas LCV is the Lower Calorific Value.

For the TtW values, Companies are entitled to diverge from the default values contained in Annex II, with the exception of CO2 emission factor for fossil fuels, provided that actual values are certified by means of laboratory testing or direct emissions measurements.

What is the baseline (benchmark) that serves as the starting point for the purpose of the regulation?

The baseline GHG intensity was calculated based on the verified EU MRV data used on board in 2020, equal to 91.16 gCO2/MJ.

What are the standard emission factors of fuel grades to be used? 

The standard emission factors for different fuel types are contained in Annex II of the FuelEU Maritime Regulation (Regulation (EU) 2023/1805).

Which Global Warming Potential (GWP) values should be used for the calculation of Tank-to-Wake CO2 equivalent emissions of methane (CH4) and nitrous oxides (N2O)? 

Currently, the FuelEU Maritime Regulation (EU) 2023/1805 refers to the GWPs defined in the RED II, 1, 25 and 298 for CO2, CH4 and N2O, respectively. In the future, these GWPs will align with those used in the revised EU MRV Regulation (EU) 2023/957 of the fifth IPCC study (AR5), 1, 28 and 265, respectively, for CO2, CH4 and N2O. 

What is the additional required documentation that should complement the Bunker Delivery Notes (BDNs) when bunkering biofuel(s) or other alternative fuels?

For the FuelEU Maritime Regulation, BDNs, including fuels other than fossil fuels used on board, shall be complemented with the following information regarding those fuels:

• Lower Calorific Value (LCV);
• For biofuels, E values as established in accordance with the methodologies laid down in Directive (EU) 2018/2001, Part C of Annex V and Part B of Annex VI [gCO2e/MJ] and related evidence of compliance with the rules set out in that directive for those fuels, identifying the fuel production pathway;
• For fuels other than fossil fuels and biofuels, WtT GHG emission factor [gCO2e/MJ] and related certificate identifying the fuel production pathway

Which emission factors should be applied to traditional fossil fuels? Should fossil fuels also be certified under an accredited scheme?

Fossil fuels are not required to be provided with sustainability certification as they are out of the scope of any sustainability certification framework. The default emission factors must be used in the calculation of the FuelEU Maritime GHG intensity of the energy used onboard, as specified in Annex II. For traditional bunker oil fossil fuels, the distinction is made based on the grade as specified by ISO 8217.

Why does the penalty calculation include the GHG intensity achieved in the denominator? 

The FuelEU Maritime Regulation targets the GHG intensity of the energy used on board and based on this principle the remedial penalty formula is developed.

The penalty is expressed with reference to VLSFO, equal to 2400 EUR per MT VLSFO. Therefore, it is necessary to move from the Compliance Balance, expressed in gCO2e to MJ and then to VLSFO. To do this, perform the following calculations:

1. Calculate the Compliance Balance in gCO2e
2. From the Compliance Balance calculate the associated energy, the “non-compliant energy” 

3. From the non-compliant energy, calculate the equivalent non-compliant MT of VLSFO 

4. From the equivalent non-compliance VLSFO, calculate the penalty 

What fees will companies have to pay for using non-compliant fuels? How are these calculated?

The remedial penalty of non-compliance with the GHG intensity limit is calculated as:

Where the compliance balance is calculated as:

The remedial penalty of non-compliance with the onshore power supply is calculated as:

1.5 · 𝐸𝑠𝑡𝑎𝑏𝑙𝑖𝑠ℎ𝑒𝑑 𝑇𝑜𝑡𝑎𝑙 𝐸𝑙𝑒𝑐𝑡𝑟𝑖𝑐𝑎𝑙 𝑃𝑜𝑤𝑒𝑟 𝐷𝑒𝑚𝑎𝑛𝑑 𝑎𝑡 𝐵𝑒𝑟𝑡ℎ · 𝐻𝑜𝑢𝑟𝑠 𝑠𝑝𝑒𝑛𝑡 𝑎𝑡 𝑏𝑒𝑟𝑡ℎ 𝑖𝑛 𝑛𝑜𝑛 − 𝑐𝑜𝑚𝑝𝑙𝑖𝑎𝑛𝑐

The remedial penalty with respect to the RNFBO subtarget is calculated as:

Where CB_RFNBO is the compliance balance in MJ of RFNBO subtarget equal to:

The graph below shows the daily compliance cost for a ship using LSFO based on its  daily fuel oil consumption:

If a ship has a compliance deficit for two consecutive reporting periods or more, the remedial penalty will be increased by 10% every consecutive reporting period until the ship achieves a compliance surplus for the increase factor to reset.

Is there any benefit for a vessel to invest in Onshore Power Supply (OPS)

Yes. Considering the positive effects of OPS and the need to incentivize the uptake of that technology in
the short term, the carbon intensity of the electricity supplied at berth should be counted as zero. In
essence, this infers that the more electricity the vessel gets from onshore, the lower its actual GHG
intensity can be.

Are there any alternative means for containerships and passenger ships to achieve compliance with the obligation of Onshore Power Supply (OPS)?

Yes, as per paragraph 5.(b) of Article 6 of the FuelEU Maritime Regulation, containerships and passenger ships are not obliged to connect to OPS and use it for all their electrical power demand at berth, on condition that these use zero-emission technologies that comply with the general requirements for such technologies provided for in Annex III of the Regulation and specified in the delegated and implementing acts to be published. The following non-exhaustive table identifies types of technologies as well general requirements for their operation to be considered as zero-emission technologies:

Will renewable fuels be incentivized?

The production costs of RFNBO are currently much higher than the market price of conventional fuels. Therefore, two measures are provided to ensure the support for the uptake of sustainable RFNBOs.

1.      A ‘multiplier’ until the end of 2033, allowing the energy from RFNBO to count twice

2.      A sub-target of 2 percent RFNBO minimum use of the total yearly energy use by ship which shall apply as of 2034 if, the share of reported RFNBOs used by ships is less than 1 percent by 2031.

This combination of measures to support RFNBOs is intended to give ship operators and fuel suppliers a market signal for investment in this type of renewable, scalable and sustainable fuel. However as per Article 10.1(b), RFNBOs (and low/recycled carbon fuels) should meet the GHG emissions savings threshold set out in RED II Directive (at least 70percent savings which correspond to max. 28.2 g CO2e/MJ WtW GHG intensity based on 94 gCO2e/MJ fossil fuel comparator), otherwise shall be considered as a fossil fuel.

Is there a benefit for using biofuels and biogas?

Biofuels and biogas can be used as a compliance option for the purposes of reducing the WtW average GHG intensity of the energy used on board for meeting the GHG intensity limits on a ship or pool level. However as per Article 10.1(a) biofuels and biogas should comply with the sustainability and GHG emissions saving criteria set out in RED II Directive and should not be produced from food and feed crops, otherwise shall be considered as a fossil fuel.

What about ‘Blue fuels’?

The FuelEU Maritime Regulation will also count the possible contributions from low-carbon synthetic fuels derived from low-carbon hydrogen, including or not Carbon Capture Systems. Eligibility of “blue fuels” (synthetic fuels derived from fossil-based hydrogen and CCS), is considered in Article 10(2) where it is stated that other than biofuels, biogas, RFNBOs or renewable/low carbon fuels, also fuels certified in accordance with the European Union legal acts concerning internal markets in renewable and natural gases and in hydrogen, establishing a GHG emissions savings threshold and an associated methodology to calculate GHG emissions from production of such fuels, will be eligible to contribute to the reduction of the GHG intensity of the energy used onboard. In addition to blue fuels, low-carbon synthetic fuels derived from nuclear electricity will be covered.

What is the impact of energy efficiency technologies in the FuelEU Maritime Regulation?

Energy efficiency technologies can assist in reducing onboard fuel consumption, which in the context of EU ETS has a direct effect on the compliance cost, as less fuel consumed results to less taxed emissions. The FuelEU Regulation is a technical measure, that targets the GHG intensity of the energy used onboard and not the amount of energy or the fuel consumed. The only energy efficiency technology that directly impacts the GHG intensity of the energy used on board is the wind-assisted propulsion, however it shall be noted that in the case that the vessel’s GHG energy intensity is above the target, the remedial penalty that arises is proportional to the energy consumed on board, therefore less amount of non-compliant energy consumed results to lower remedial penalty. 

What is the impact of wind-assisted propulsion (WAP) on the GHG intensity of the energy used on board?

The impact of WAP on the GHG intensity of the energy used on board can be reflected via the factor fwind as per the GHG intensity formula in the FuelEU Regulation.

The fwind term is calculated in accordance with the PWind/P­Prop term and for no WAP installed is equal to 1 and the minimum value it can get is 0.95 as per the table below.

As per the definitions contained in the FuelEU Maritime Regulation the P_Wind and P_Prop values are calculated as:

• P_Wind is the available effective power of the wind-assisted propulsion systems and corresponds to f_eff * P_eff as calculated in accordance with the 2021 guidance on treatment of innovative energy efficiency technologies for calculation and verification of the attained energy efficiency design index (EEDI) and energy efficiency existing ships design index (EEXI) (MEPC.1/Circ.896);

• P_Prop is the propulsion power of the ship and corresponds to P_ME as defined in the 2018 guidelines on the method of calculation of the attained EEDI for new ships (IMO resolution MEPC.364(79)) and the 2021 guidelines on the method of calculation of the attained EEXI (IMO resolution MEPC.333(76)). Where shaft motors are installed, P_Prop = P_ME + P_PTI(i),shaft.

WAP can have a significantly positive impact on achieving compliance with the FuelEU Maritime Regulation, even for vessels using fossil fuels such as LFO or MDO/MGO. For example, a vessel that has WAP installed and an f_wind factor equal to 0.97 can achieve compliance while still using LFO or MDO/MGO in the years 2025-2030 whereas a vessel with f_wind equal to 0.95, can even offset another vessel with similar consumptions but with no WAP installed in a pooling arrangement.

The graph below shows the reduced daily compliance cost for a ship using LSFO fitted with a WAP with a reward factor f_wind = 97 percent:

Is onboard carbon capture and storage mentioned?

Onboard carbon capture (OCC) is not yet specified in the Regulation, but Article 30.2.(i) provides that the Commission shall consider the possibility to include OCC, in the calculation of the GHG intensity of the energy used on board and of the compliance balance, subject to the availability of a verifiable method for monitoring and accounting of the captured carbon.

Will shipping companies use the same database for EU MRV ETS and FuelEU Maritime?

The European Commission is developing a module within Thetis-MRV, called the FuelEU Maritime database. The FuelEU Maritime database shall be used to keep a record of actions related to verification activities, of the compliance balance of ships, including use of the flexibility mechanisms such as the banking/borrowing and pooling of compliance.

When is the FuelEU Maritime database expected to be ready? 

The FuelEU Maritime database is expected to be ready by the end of the third quarter of 2024.

Will it be necessary to make separate monitoring plans (MP) for EU ETS and FuelEU Maritime?

Yes, two separate monitoring plans are required, one for the EU MRV and one for the FuelEU Maritime Regulation. Each submitted monitoring plan will follow independent workflow processes.

The European Commission has published the FuelEU Maritime monitoring plan template by means of Commission Implementing Regulation (EU) 2024/2031. By 31 August 2024, companies shall submit to their verifier a monitoring plan for each of their ships and, from 1 January 2025, start monitoring their emissions based on their verified monitoring plan.

Does the verifier for MRV monitoring plan and FuelEU Maritime monitoring plan have to be the same?

No, the verifier for the EU MRV monitoring plan and FuelEU Maritime monitoring plan can be different.

Is there any benefit for the shipowners to use the measurement approach (direct emissions measurements) instead of the calculation approach?

As per Annex I of the FuelEU Maritime Regulation (EU) 2023/1805, in accordance with the monitoring plan and upon assessment by the verifier, a company may use other methods, such as direct CO2eq measurement or laboratory testing, if these methods enhance the overall accuracy of the calculation.

The benefits of the measurement approach (direct CO2eq measurement or laboratory testing) are that companies are entitled to diverge from the default values for the Tank-to-Wake emission factors, with the exception of Tank-to-Wake CO2 emission factors for fossil fuels, for the purpose of enhanced overall accuracy of their data. 

Can voyages be reported as a cumulative total under the FuelEU Maritime Regulation, or must each voyage be reported individually? 

The FuelEU Maritime regulation mandates that ships monitor and record data for each voyage. This information is to be compiled in the ship-specific FuelEU Maritime Report on an annual basis. Based on this report, verifiers calculate annual aggregates, such as the ship’s yearly average GHG intensity and compliance balance. 

For ships engaged in international voyages, and using renewable and low carbon fuels throughout their journey, how is the energy from the biofuel allocated in the calculation of the GHG intensity? 

All renewable and low-carbon fuels, compliant with the relevant criteria under FuelEU Martime Article 10 and used in international voyages, can be counted as contributing to the GHG intensity of half of the energy used during those voyages and up to the maximum energy amount falling under the scope of FuelEU Maritime Article 2(1)(d).

The following two examples provide further clarifications:

• Use of bio-blend B30 (30 percent biodiesel + 70 percent fossil diesel) – the whole biodiesel fraction can be counted to cover the energy used during an international voyage
• Use of bio-blend B60 (60 percent biodiesel + 40 percent fossil diesel) – the maximum amount of energy falling under the scope of the Regulation is considered to be covered by the biodiesel

Assuming that a vessel performed a voyage between an EU port and a third country port and consumed in that voyage 100 MT of B30 blend (HVO with WtW greenhouse gas intensity equal to 15.00 gCO2e/MJ, and LCV equal to 0.043 MJ/g and MDO with WtW greenhouse gas intensity equal to 90.77 gCO2e/MJ and LCV equal to 0.0427 MJ/g).

The total energy of the voyage is equal to 4,279,000 MJ, but half of the energy of that voyage is under scope. Therefore, the energy under scope is equal to 2,139,500 MJ.

Since the whole biodiesel fraction can be counted to cover the energy used during that voyage, which is equal to 1,290,000 MJ, the remaining energy, equal to 849,500 MJ, derives from the fossil part, in this case, MDO.

Therefore, the actual GHG intensity of that international voyage is equal to:

In case the vessel for the same voyage used a B60 blend, the energy of this voyage is equal to 4,288,000 MJ, whereas the energy derived from HVO is equal to 2,580,000 MJ, which is more than the energy under scope – half the energy of the voyage – equal to 2,144,000 MJ. 

In this case, all the energy under scope, 2,144,000 MJ, is covered from biofuel energy. Therefore, the actual GHG intensity of that voyage is equal to:

What is the timeline for compliance?

Companies should be responsible for monitoring and reporting the amount and type of energy used on board by ships and document the method used in a monitoring plan. The plan, as well as the annual emission reports shall be submitted to and assessed by the verifier in accordance with the timeline indicated below:

Does the FuelEU Maritime Regulation provide flexibility for compliance?

In the case that a ship has a compliance surplus, the company may ‘bank’ and use it for the same ship in the following reporting period. In a case where the vessel has a compliance deficit, the company may borrow an advance compliance surplus of the corresponding amount from the next reporting period. However, in the next reporting period, the borrowed compliance surplus must be multiplied by 1.1 and be subtracted from the same ship’s balance.

Furthermore, the compliance balance for GHG intensity and sub-target of RFNBOs can be pooled. Pools can consist of vessels of the same or different companies. Two different pools can be used for compliance with the GHG intensity target and RFNBOs sub-target. A pool is only possible if total pooled compliance is positive, ships that had a compliance deficit do not have a higher compliance deficit after the allocation of the pool or if ships that have a compliance surplus do not have a compliance deficit after the allocation of the pool.

For how many years can the compliance balance surplus of one year be transferred forward?

Banking can take place in one, two or more successive years. Banked compliance surplus does not expire. If for two or more successive years, the compliance balance is positive, the surplus is successively banked, cumulatively, to the following reporting period.

What happens if a vessel banks or borrows compliance surplus and there is a change of company in the next year? 

The banking of compliance and/or borrowing of compliance follows the ship. It is up to the selling and buying companies to agree on the compensation.

Can a ship borrow compliance balance from the following reporting period and participate in a pool in the current reporting period? 

No, as per Article 21(7), a ship that borrowed compliance balance from the following reporting period cannot participate in a pool.

How is the penalty expected to be enforced over time?

Compliance with the FuelEU Maritime Regulation will be evidenced by a FuelEU Maritime document of compliance. By 30 June of the verification period, in the case that the ship does not have a compliance deficit, the verifier shall issue a FuelEU Maritime document of compliance, otherwise, provided that the company has paid an amount equal to the FuelEU Maritime penalties, the administering State shall issue a FuelEU Maritime document of compliance. 

What are the consequences of failing to pay the penalty?

Consequences include expulsion from ports, flag detentions and potentially restricted access to ports in multiple member States, based on Article 25 of the FuelEU Maritime Regulation.

Who will pay the remedial penalty? The owners, charterers or ISM managers?

The entity responsible for compliance remains the ISM Manager/DoC holder, without the possibility to transfer this responsibility to the registered owner. Nevertheless, the DoC holder may through contractual agreements be reimbursed from the charterer for the cost of the FuelEU Maritime penalties.

After the payment of the remedial penalty to the Administering Authority (AA), will the AA provide any official receipt? 

After payment of the remedial penalty, the Administering Authority will issue the FuelEU Maritime Document of Compliance (DoC) which will be valid for 18 months or until a new FuelEU Maritime DoC is issued, whichever comes first.