How To Calculate Fuel EU Compliance Balance And Fuel EU Penalty?

The Fuel EU Maritime Regulation aims to reduce greenhouse gas emissions from shipping by a significant amount. This is achieved by encouraging the use of renewable and low-carbon fuels, progressively stricter limits on the GHG intensity of energy used by ships, and onshore power supply in ports. 

The regulation is aiming for at least a 55% reduction of GHG emissions by 2030 and targeting climate neutrality by 2050 in the maritime sector. It fits in with broader EU climate goals.

The FuelEU Maritime Regulation has significant financial implications for shipping companies in transitioning to new GHG intensity targets. From 2025, shipping vessels will have to attain a 2% reduction in GHG compared to the 2020 base level; this will increase to 6% by 2030 and reach a reduction of 80% by 2050. 

Non-compliance will be penalised, and the charges may be as high as €2,400 for every metric ton of VLSFO (Very Low Sulphur Fuel Oil) that is emitted, which may create significant costs for companies which do not switch to low-carbon fuels or biofuels.

Moreover, this regulation will force companies to invest more in alternative fuels and technologies, for example, onshore power supply and energy-efficient systems, thus overstretching the financial resources. 

There will also be increased operational costs as more reporting and compliance measures will be required, which will, in turn, require the use of digital solutions to efficiently manage data on emissions and predict compliance costs.

Overall, though the new regulation is intended to promote innovation and sustainability within the maritime sector, a high cost will be presented by the regulation to the shipping companies during the transition period.

Below are the steps to understand the simplified and structured way to calculate the compliance balance and penalty associated with Fuel EU Maritime regulation for each vessel.

Step 1: Calculate the GHG intensity for the vessel

Parameters required for calculation:

• Fuel consumption per fuel type (in g fuel):  Source: Noon reporting system of the vessel
• Tank-to-Wake (TtW) emission factor per fuel type (in g CO2e / MJ): Source: Annex II of the FuelEU Maritime Re…

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