FuelEU Maritime Simplified Terminologies

FuelEU Maritime is a regulation structure in the European Union’s “Fit for 55” package that addresses the reduction of greenhouse gas (GHG) emissions from the maritime sector. This regulation introduces several basic terms, which are important for understanding its effects and requirements. A few of those terms are explained in this article.

GHG Intensity

Greenhouse gas (GHG) intensity is the amount of GHGs emitted per unit of energy consumed onboard vessels in grams of CO2 equivalent per megajoule (gCO2e/MJ). The policy does provide for step-by-step GHG intensity reduction. It starts at 2 per cent in 2025 and peaks at an 80 per cent reduction in 2050. The above estimations assumed a base at 91.16 gCO2e /MJ. 

Well-to-Wake Emissions

WtW emissions include all lifecycle greenhouse gas emissions in extraction, production, transport, and combustion onboard ships. Tank-to-Wake (TtW) vs. WtW: TtW emissions account for only the portion of the lifecycle that focuses on emissions during operation, whereas WtW offers a much more comprehensive view of the footprint of a fuel.

Onshore Power Supply (OPS)

OPS is the shore supply of electrical power to seagoing vessels during their stay in port.  Regulatory Requirement: From 2030 for the first ports in TEN-T and from 2035 for further ports, both passenger and container ships will be required to connect to shore power or to use alternative zero-emission technologies when berthed.

Compliance Mechanisms

FuelEU Maritime establishes a couple of compliance mechanisms such as

Use of Compliant Fuels: Vessels may become compliant by using fuels that achieve the required standards for GHG emission intensity.

Certificates of Compliance: For biofuels and low-carbon fuels, a Certificate of Compliance shall be part of the Bunker Delivery Notes to ensure that the GHG intensity requirement is complied with.

Banking and Borrowing: Companies can bank surplus compliance from previous years or borrow against future surpluses to finance yearly deficits although borrowing triggers limits and interest penalties.

Vessel Applicability

The directive shall apply to all commercial vessels with a gross tonnage of more than 5,000 GT that sail in EU ports or between EU and non-EU ports. It shall apply to both cargo and passenger vessels.

Reduction Targets

Timeline: The policy establishes measurable goals for the reduction of GHG intensity:

2025: Initial target set at 2%

2030: Enhanced target set at 6%

2035 and onwards: Cumulative reductions toward an overall target of 80% by 2050.

Pooling Mechanism

The mechanism allows firms to pool their compliance efforts with other firms in the industry to collectively achieve the regulatory requirements. Pooling enables the smaller operators or less efficient fleet owners to achieve easier compliance by sharing resources and strategies 

Penalties for Non-compliance

The regulation imposes penalties on firms that fail to comply with the GHG intensity targets. The financial incentives for compliance and an investment in cleaner technologies arise from these penalties.

Flexibility Mechanisms

The rule provides many avenues for flexibility that would help existing fleets transition to lower emissions. It encompasses technology-neutral approaches that promote innovation in sustainable fuels and energy conversion technologies.

Biofuels 

Biofuels are liquid or gaseous transport fuels, including biodiesel and bioethanol, which are produced from biomass. They provide a renewable source of energy in the EU’s transport sector and, as such, reduce greenhouse gas emissions and improve the security of supply in the EU. 

RFNBO (Renewable Fuels of Non-Biological Origin)

RFNBOs are synthetic fuels generated from renewable electricity and carbon captured directly from the atmosphere. Amongst them are e-methanol, e-ammonia, and e-diesel, which originate from renewable energy sources. According to FuelEU Maritime, RFNBOs have to fulfil the set standards in RED II, like achieving at least a 70% reduction in greenhouse gas emissions compared to conventional fuels.

Zero-emission technologies

These technologies, in the context of providing energy supply, do not allow releasing the following greenhouse gases and air pollutants into the atmosphere of ships: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur oxides (SOx), nitrogen oxides (NOx) and particulate matter (PM)

Wind-Assisted Propulsion (WAP)

WAP means propulsion, whether partial or full of a ship by wind energy harnessed by means of wind-assistance propulsion systems such as, inter alia, rotor sails, kites, hard or rigid sails, soft sails, suction wings or turbines; 

Company

In Fuel EU Maritime, company means the shipowner or any other organisation or person such as the manager or the bareboat charterer, which has assumed the responsibility for the operation of the ship from the shipowner and has agreed to take over all the duties and responsibilities imposed by the International Management Code for the Safe Operation of Ships and for Pollution Prevention; 

Ice Class

It is a notation assigned to the ship by the competent national authorities of the flag state, or an organisation recognised by that state, showing that the ship has been designed for navigation in sea-ice conditions.

Ice edge

It refers to the demarcation at any given time between the open sea and sea ice of any kind, whether fast or drifting. 

Sailing in Ice conditions

It means sailing by an ice-class ship in a sea area within the ice edge.

Electrical power demand at berth

The electricity demand of a ship at berth for meeting all energy needs is determined by the total electricity consumption of the ship, including hotel and cargo handling demands, expressed in kilowatts.

Verifier

A verifier is a legal entity that performs verification activities and has been accredited as per Regulation (EC) No 765/2008 or the Fuel EU Maritime Regulation.

FuelEU document of compliance

The FuelEU document of compliance is a unique document issued to companies by the verifier to indicate compliance with this Regulation for an established reporting period; see vessel-specific information.

CO2 equivalent

It is a metric measure used to compute the emissions from CO2, CH4 and N2O based on their global-warming potential, by converting amounts of CH4 and N2O to the equivalent amount of CO2 with the same global warming potential.

Compliance balance

It is the measure of a ship’s over- or under-compliance based on the limits of the yearly average GHG intensity of the energy used on board by a ship.

Compliance surplus

It means a compliance balance with a positive value. 

A compliance deficit

It means a compliance balance with a negative value. 

Total pool compliance balance

It means the sum of the compliance balances of all ships included in the pool.

Administering State

It is a Member State determined by applying Article 3 of Directive 2003/87/EC in relation to a company within the meaning of Fuel EU Maritime r Regulation, without prejudice to the choice of the competent authorities in charge within the relevant Member State.

Reporting period

It is a period from 1 January to 31 December of the year during which information referred to in this Regulation is monitored and recorded, where data for voyages starting and ending in two different calendar years is accounted under the calendar year concerned.

The verification period

It refers to the calendar year directly following the reporting period.

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