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In July 2021 European commission adopted the EU’s Fit for 55 package, the package consists of a basket of proposals that together along with FuelEU maritime will contribute toward the EU’s ambition of reducing its greenhouse gas (GHG) emissions by at least 55% by 2030 compared to 1990 level & ultimately become climate neutral by 2050.

FuelEU Maritime is an initiative to increase the uplift and demand for renewable and low-carbon fuels. The proposed regulation will put a limit on the GHG intensity of energy used on board a ship. The regulation will impose an obligation on certain ship types to use an onshore power supply or zero-emissions technology in ports under the jurisdiction of the EU member state
Scope of FuelEU Maritime
The proposed FuelEU Maritime initiative will apply to all commercial ships above 5,000 GT calling EU ports irrespective of the flag state, the proposed plan includes emissions at EU ports, emissions from all intra-EU voyages and 50% from the voyages between EU and non-EU ports.
The key strategy of FuelEU Maritime Proposal
  • It is a regulatory approach that emphasizes the use of renewable and low-carbon marine fuels and substitutes sources of energy, such as wind or electricity.
  • The initiative lays out a requirement to reduce the annual GHG intensity of the energy used on board by 2% starting from 2025 to 75% in 2050 compared to the level of 2020.
  • In order to have a complete picture of environmental emissions, the GHG emissions will be assessed on a well-to-wake basis & the emissions will be accounted for production, transport, distribution, and use onboard ships.
  • Along with CO2, the emissions for CH4 & N2O shall be calculated in CO2 equivalence to account for the total GHG emissions of the energy used on board.
  • The GHG intensity & amount of each type of substitute source of energy consumed at berth and at sea should also be accounted.
  • GHG Intensity corresponding to the intensity of the energy used on-board by a ship will be compared with the reference value and based on the difference a compliance balance is calculated, the ships will then have a surplus or deficit compliance balance.
  • To meet the challenges of the proposed regulation the shipping companies will be allowed to bank the compliance surplus of one reporting year to the compliance balance of the following year for the same ship. Similarly, the company can borrow an advance compliance surplus of the corresponding amount from the following reporting period.
  • The proposed regulations also allow pooling of compliance balance for ships operated by different companies that are verified by the same verifier.
Additional zero-emission requirements of energy used at berth

From 31st January 2030, the proposed regulation will require all passengers and container ships to connect to an onshore power supply (OSP) for all the energy needs when calling ports in EU member states, the regulation exempts ships already using zero-emissions technologies such as hybrid ships, ships staying less than 2 hours, ships making an unscheduled port of call for the safety of the ship or saving life, for emergency use and where the OSP is not available.
How it will affect ship operators?
The regulation has also proposed a penalty based on the non-compliance:

In case the ship is not able to achieve the reduction target the penalty will be imposed which is calculated by the external verifier based on the proposed methodology.

If the ship is unable to connect to shore electricity at the EU berth the penalty for each non-compliance port will be calculated based on the proposed formula.
Proposed timeline

How can Verifavia shipping help operators to comply with future regulations?

Verifavia is the world's leading independent carbon emissions verification body for shipping under the EU MRV and the IMO DCS. The principles laid down for verifiers in the regulations are similar to EU MRV. Hence Verifavia is best placed to become an accredited verifier once the regulation is adopted and implemented.

Verifavia with its vast experience, robust process & continuous periodic verification can help shipping companies reach compliance at the same time will allow operators to review GHG intensity and evaluate in advance the penalties associated in the midst of reporting year.

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