Navigating FuelEU Maritime Regulation: Compliance Strategies for Shipping Companies Before 2025

The FuelEU Maritime regulation, set to take effect on 1 January 2025, will impose penalties on shipping companies that fail to meet carbon intensity reduction targets. These targets will become stricter every five years, with requirements applying to energy used on voyages and port calls within the EU, as well as 50% of voyages in and out. To comply, companies can either pay a penalty or take action to reduce GHG intensity, such as using biofuels or LNG/LPG, or participating in pooling where vessels can compensate for each other’s performance.

Despite the looming regulation, some shipping companies, particularly smaller ones, are considering simply paying the penalty instead of exploring alternative compliance options. However, this approach may become increasingly costly over time, as penalties will rise by 10% each year of non-compliance. Companies are urged to consider biofuels and pooling as financially beneficial alternatives to offset deficits and reduce costs associated with compliance.

Experts advise that the most economic compliance tactic will vary for each company, depending on factors such as trading patterns, availability of sustainable fuel options, and pricing compared to penalties. Continuous effort and tracking of compliance options are necessary to find the optimal path for each compliance and charter period, as market variables and regulations may change throughout the year. Companies are encouraged to understand the complexities of the market and explore all available options to effectively navigate the FuelEU Maritime regulation.

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