News / Launch of 'complex' Fuel EU regulation proving a challenge for some

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Shipping stakeholders were under-prepared for the arrival of Fuel EU – the complexity of relationships between ship owners, managers and charterers posing the biggest challenge – but sustainable practices are gaining momentum.  

Since 1 January, carriers have had to increase the surcharge on their vessel emissions, from 40% to 70%, with the introduction of new EU ETS rules and the FuelEU regulation, which sets targets for the greenhouse gas (GHG) intensity of the energy used on a ship. 

Friederike Hesse, co-founder and MD of maritime carbon solutions software platform zero44, told The Loadstar the EU ETS increase had meant “many companies are now taking EU ETS more seriously”.  

And Albrecht Grell, MD of Hamburg-based maritime technology firm Oceanscore, explained that EU ETS had “helped to prepare the ground so that verifiers and reporting solutions are better prepared than they were a year ago”.  

“Those who manage EU ETS data well by now (and some of them took quite a while to get there) also appear to be able to manage FuelEU well,” he told The Loadstar. 

However, Ms Hesse warned that the level of preparedness for FuelEU “is still quite low”. 

“With notable exceptions, the general knowledge about the regulation is limited. Also, the authorities are adding to this picture by issuing short-term changes,” she said.  

These include Norway and Iceland delaying the introduction of FuelEU, “which means these ports will be considered third-country ports for the time being”, and Greece, Denmark, Italy and Malta having “achieved exceptions from FuelEU for their small island ports”. 

But Mr Grell claimed “the biggest challenge” concerning FuelEU was the complexity of the relationships between ship owners and managers as well as between owners and charterers.  

“With the EU deciding to allocate responsibility for FuelEU compliance to the DOC [document of compliance] holders, and to not implement a ‘polluter pays principle’, contractual arrangements become even more important than they have been for EU ETS,” he said. 

“And progress here is not what it should be,” he added. 

Indeed, Ms Hesse told The Loadstar that shipping association Bimco’s FuelEU clauses for time-charters had “received a lot of criticism from industry stakeholders due to its complexity”. 

Mr Grell noted that “very different proposals” were emerging from charterers, “many of which will not be agreeable to owners”. And he warned: “With charterparties not yet agreed, we are even further away from clear shipman clauses, leaving DOC holders substantially exposed.” 

But despite the regulatory stress, Ms Hesse concluded that “the costs definitely are significant and are driving change… with a clear and strong trend towards sustainable choices”. 

And Mr Grell noted that FuelEU had seemingly stimulated an adoption of biofuels beyond what EU ETS achieved, “even though the cost of EU ETS when burning conventional bunkers is more than three times that of FuelEU”.  

He added: “The wish to comply with FuelEU through the use of biofuels seems to have moved the needle. I believe that the developments now triggered with the implementation of FuelEU Maritime will be lasting and gain momentum as time progresses.”