The Effect's of EU Maritime Decarbonisation Rules as Industry Confronts Compliance Burden

European shipping companies began monitoring emissions under the FuelEU Maritime Regulation from January 2025, marking a critical milestone in Brussels' ambitious drive to decarbonize the sector through progressively stringent fuel intensity limits. The regulation, part of the EU's Fit for 55 package, sets the maritime industry on a trajectory requiring an 80% reduction in greenhouse gas intensity by 2050 compared to 2020 levels.

The regulation mandates that all ships above 5,000 gross tonnage calling at EU ports reduce the greenhouse gas intensity of energy used onboard, beginning with a 2% decrease in 2025 and escalating incrementally. Companies must monitor energy use during EU-related voyages and port stays throughout 2025, submitting their first FuelEU Report to accredited verifiers by 31 January 2026 as the basis for compliance calculations.

The framework covers carbon dioxide, methane and nitrous oxide emissions on a well-to-wake basis,

examining the full lifecycle of fuels used onboard.

From 2030, passenger and container ships at berth must utilize onshore power supply or alternative zero-emission technologies at major ports, extending to all EU ports with such capability by 2035.

The regulation complements the EU Emissions Trading System's extension to maritime transport, which began phasing in during 2024 with shipping companies required to surrender allowances for 40% of that year's emissions by September 2025. From January 2025, ETS coverage expanded to 70% of maritime emissions, substantially increasing carbon costs and spurring demand for energy-efficiency technologies.

Industry stakeholders confront significant procurement challenges securing sufficient supplies of renewable and low-carbon fuel blends. Alternative maritime fuels command substantial premiums, with B30 biofuel trading around $879 per metric tonne in October against $630 for conventional very low sulphur fuel oil. Financial penalties for non-compliance escalate with continued violations, calculated based on degrees of non-compliance with greenhouse gas intensity targets and renewable fuel usage requirements.