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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 towards 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 minimise 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 incentivising 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 5,000 GT 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 minimise emissions. Shipowners, charterers, and other stakeholders in the supply chain must work collaboratively to transition to sustainable fuel options.

Non-compliance with the FMR 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

As compliance with the regulation is likely to drive up operational costs, it will be important for charterers to plan fuel costs and availability well in advance and make calculated decisions. They should also review contractual arrangements to 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 accommodate alternative fuels or OPS requirements may incur significant financial costs. Operators also need to comply with fuel intensity standards, which may require modifications to voyage planning and operational efficiency.

Low-carbon fuels and OPS technology will require fuel suppliers and port operators to invest in the relevant infrastructure. This will involve accelerating the production and distribution of RFNBOs and other alternative fuels to meet demand. Ports must also invest in electrification and grid upgrades so ships can connect to the power grid.

Other participants in the supply chain should consider the recent rise in shipping costs, potential price increases and delays, as well as a readjustment of trade routes 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 optimisation, 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, 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 for shipowners, is likely to be a highly topical issue in the first half of 2025. Transparency, accurate reporting, and ensuring compliance will be vital. It is too early to predict how the legal dimension will evolve, but as with any regulation, it is likely that this framework will take 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 online.enquiries@LA-law.com or 0344 967 0793.