The FuelEU Maritime Regulation
The FuelEU Maritime Regulation”FMR”, which came into force on 1 January 2025, is one of the European Union’s major initiatives, to reduce greenhouse gas (“GHG”) emissions in the maritime sector. As an integral part of the EU’s “Fit for 55” strategy, this regulation encourages the transition to low-carbon and renewable fuels, aligning with broader climate commitments. Given the maritime industry’s significant contribution to global emissions, this measure represents a major step toward greener and more sustainable transport.
A fundamental aspect of the regulation is the gradual reduction of GHG intensity in marine fuels, used within EU waters. The framework mandates a 2% decrease by 2025, with successive targets leading to an 80% reduction by 2050. It follows a “well-to-wake” methodology, assessing emissions throughout the entire fuel lifecycle – from production to utilisation. This comprehensive approach ensures that all emissions linked to fuel consumption are considered, fostering the shift to cleaner energy sources.
Beyond fuel efficiency, the regulation requires vessels to adopt Onshore Power Supply (OPS) technology at major EU ports. Beginning in 2030, passenger and container ships must either connect to OPS or, implement zero-emission alternatives to minimize emissions while docked. By 2035, this obligation will extend to all EU ports equipped with OPS infrastructure. The adoption of OPS aims to lower pollution in coastal areas and improve the environmental footprint of maritime operations.
Another pivotal element is the promotion of Renewable Fuels of Non-Biological Origin (RFNBOs), including e-methanol and e-ammonia, which are derived from renewable energy sources. By incentivizing these synthetic fuels, the EU seeks to accelerate the transition to a cleaner and more resilient maritime energy system.
Compliance Requirements and Reporting
The ship’s ISM company/Document of compliance (DoC) holder, is responsible for FMR compliance. Starting from 1 January 2025, owners, managers, or charterers operating cargo and passenger ships of 5000GT and above that dock at an EEA port must:
- Collect and report data as per the monitoring plan for:
- 100% of energy used for voyages between two EEA ports and while at berth, on a well-to-wake basis.
- 50% of energy used for voyages between EEA and non-EU ports.
- Obtain a valid FuelEU DoC for the ship by 30 June 2026.
To comply with the FuelEU Maritime Regulation, ship operators must ensure their vessels meet the required GHG intensity reduction targets and use approved low-carbon fuels. Compliance will be monitored through fuel usage reporting and independent verification processes.
Ensuring compliance involves investing in cleaner fuel technologies, upgrading vessels to use OPS, and adopting operational efficiencies to minimize emissions. Shipowners, charterers, and other stakeholders in the supply chain must work collaboratively to transition to sustainable fuel options.
Non-compliance with the FMRn will result in financial penalties. Ships failing to meet GHG intensity targets may be subject to fines, and persistent violations could lead to restrictions on port access or operational limitations. The EU aims to enforce strict compliance to drive the adoption of greener maritime practices across the industry.
FMR: Impacts Across The Maritime Industry
With the regulation compliance likely to drive up operational costs, it will be important for charterers to plan fuel costs and availability, well ahead of time and make calculated decisions. They should also review contractual arrangements that establish accountability for fuel conformity.
There will be added incentives for owners to either retrofit ships or build new energy-efficient hulls. However, upgrading fleets to account for alternative fuels or OPS requirements may incur heavy financial costs. Operators also need to comply with fuel intensity standards, which can require modification in voyage planning and operational efficiency.
Low-carbon fuels and OPS technology will require fuel suppliers and port operators to invest in the relevant infrastructure. That will involve accelerating production and distribution of RFNBOs and other alternative fuels to meet demand. Ports must also invest in electrification and grid upgrades so ships can tie into the power grid.
Other participants in the supply chain need look no further than the recently higher cost of shipping, potential increases and delays, as well as a readjustment of trade routes that have been driven by fuel availability and regulatory compliance
Key Considerations
- Cost Implications: Increased investment in fuel technology, vessel retrofitting, and OPS infrastructure.
- Operational Adjustments: Changes in fuel procurement, voyage optimization, and emissions reporting requirements.
- Regulatory Compliance: Ensuring adherence to EU standards to avoid penalties and sanctions.
- Technological Advancements: Adoption of sustainable fuels and innovations in ship propulsion systems.
- Infrastructure Development: Enhancements in port facilities to accommodate new fuel types and electrification needs.
The FMR in general, like the EU ETS, EEXI and CII regulations, requires coordinated efforts from all stakeholders in the sector, to ensure continuity and efficiency. The implementation and legal framework of FMR, especially by shipowners, is likely to be a highly topical issue in the first half of 2025. Transparency, accurate reporting and ensuring that compliances are fulfilled will be vital. It is premature to say anything about the direction in which the legal dimension will evolve, but as with any regulation, it seems that this regulation will take some time to settle.
Advice
For expert advice on navigating the European shipping market, managing supply chain risks, or optimising logistics strategies, contact our Shipping, Logistics and Energy team at [email protected] or 0344 967 0793.
