Strategies for navigating FuelEU Maritime compliance

“Simulating outcomes for a theoretical case-study vessel demonstrates how different approaches impact expenses and FuelEU compliance over a 20-year period,” says Ola Gundersen Skåre, Consultant, Environment Advisory at DNV and lead author of the paper.  

DNV study on FuelEU compliance strategies

FuelEU Maritime sets stringent targets to reduce well-to-wake GHG emission intensity for energy used on board ships within its scope, encouraging vessels to adopt low-emission technologies or fuels. The regulation also introduces mechanisms such as banking, borrowing and pooling compliance balances to enhance strategic flexibility.

DNV’s white paper 'FuelEU Maritime: Requirements, compliance strategies, and commercial impacts' outlines regulatory requirements and compliance strategies and examines the roles of key stakeholders to help businesses navigate the commercial impact of these changes.

To compare the impact and costs of different compliance strategies, the paper runs a case study for an 80,000 dwt bulk carrier operating exclusively in EU and European Economic Area (EEA) waters from 2025 to 2044. All assumptions made in the modelling are described in the paper.

Simulations in the case study investigate three primary strategies (Figure 2). One is to pay financial penalties for non-compliance. A second is to use low-GHG-intensity fuels and energy sources. A third is to utilize FuelEU flexibility mechanisms. Each option involves a trade-off between cost, GHG reduction and operational feasibility.

Paying financial penalties and switching fuels

The most straightforward yet costly approach is to continue using marine gas oil (MGO) and pay penalties for exceeding GHG intensity thresholds. Over the case-study vessel’s lifetime, this strategy incurs cumulative costs of nearly USD 230 million (MUSD), making it the least economical option. Stricter regulations in later years amplify annual costs, particularly after 2035.

The study explores several options for adopting low-GHG-intensity fuels and energy sources. Blending bio-MGO with conventional MGO achieves compliance but raises fuel costs progressively, totalling more than 130 MUSD over the vessel’s lifetime.

Using liquefied natural gas (LNG) with bio-LNG emerges as the most cost-effective strategy (120 MUSD). LNG offers compliance surpluses until 2035 due to its lower GHG intensity compared to MGO.

Using e-methanol and blue ammonia fuels ensures compliance but at higher lifetime costs of nearly 170 MUSD and 150 MUSD, respectively. Both require gradual increases in usage, especially as regulations tighten after 2035.

Energy-efficiency measures and shore power can cut lifetime costs

Enhancing energy efficiency – for example by adopting wind-assisted propulsion systems (WAPS) – reduces fuel consumption and compliance costs.

For instance, WAPS cuts the case-study vessel’s lifetime costs by 7 MUSD compared with the basic bio-MGO strategy.

Using shore power can be a cost-effective way to achieve FuelEU compliance, improving GHG intensity and potentially reducing fuel expenditure during the early years.

Using FuelEU Maritime’s flexibility mechanisms

The banking, borrowing and pooling mechanisms offer innovative cost-saving compliance opportunities.

LNG-fuelled vessels can bank early-year surpluses to offset future deficits, potentially ensuring compliance throughout the vessel’s lifespan without switching to expensive lower-GHG fuels .

Or an operator can temporarily offset deficits by borrowing compliance balance from the following year, though interest and penalties apply.

Or vessels using green fuels – e-methanol for example – can generate compliance surpluses to trade within a pool, offsetting the deficits of conventional oil-fuelled vessels.

Economic and environmental insights

The case study highlights significant cost disparities among strategies. For example, adopting bio-LNG saves up to 21 MUSD (16%) compared with the bio-MGO baseline (Figure 3), mainly because the vessel is allowed to run on fossil LNG for the first years until 2035. Penalty-only strategies consistently rank as the costliest due to compounding fees over time.

“Energy-efficiency technologies reduce fuel consumption, improving the economic feasibility of strategies like blending in bio-MGO. However, except for WAPS, they do not independently ensure compliance with GHG intensity targets,” Skåre explains.  

“The integration of flexibility mechanisms like pooling allows vessels to maximize green-fuel capacities while sharing compliance costs across fleets. This approach is particularly advantageous for operators with access to low-GHG fuels – for example e-methanol.”

It should be recognized that the results presented are sensitive to the input assumptions, such as the fuel price, fuel availability and the well-to-wake GHG intensity of the fuels.

Strategic recommendations to comply with FuelEU Maritime

The case study supports several key recommendations in the white paper. One is that selecting the optimal compliance strategy depends on a set of factors such as fleet characteristics, fuel price and availability, and regulatory outlook.

Alongside energy-efficiency upgrades, having a vessel that can run on LNG ensures long-term cost savings and compliance for the case vessel given the fuel prices and GHG intensities assumed in the case study. Leveraging flexibility mechanisms further enhances economic and operational resilience under FuelEU Maritime.

“The comprehensive analysis in the white paper underscores the importance of proactive planning and strategic decision-making in navigating the evolving maritime regulatory landscape for GHG emissions,” Skåre concludes.

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