Are You Ready for FuelEU Maritime?

Source: 6/3/2024, Location: Europe

“FuelEU Maritime comes into force in precisely 211 days. Are you ready?”

That was the question to the shipping industry from ABS Chairman and CEO Christopher J. Wiernicki as he launched the Posidonia Shipping Exhibition with a keynote address to the Capital Link Maritime Leaders Summit, highlighting the disruptive potential of incoming regulation.

“FuelEU creates a new hurdle to clear every five years to avoid an emissions bill, but its potential impact lies in the way it turbocharges return on investment in alternative fuels technology. The regulation aims to drive fundamental, disruptive change, to reshape the industry around us well before 2050 and reward first movers on emissions reduction technology,” said Wiernicki.

He outlined the potential for pooling compliance surpluses from lower emission vessels generated under FuelEU to offset compliance deficits of older tonnage or be sold to other operators.

“It is in the regulators’ plan for pooling of surpluses that the game changing nature of FuelEU is most clearly revealed,” he said. “ABS research indicates the power of pooling will be significant, hugely rewarding pioneers of alternative fuel technologies. What is the value of this new marketplace for compliance? Will we see modern, ultra-low emission vessels effectively running two revenue streams? Or will we see smaller operators pushed out, unable to raise funds to invest in newer assets and lacking the scale needed to pool to reduce the escalating bills attached to older tonnage?”

He highlighted how FuelEU was not only a new reality for vessels trading in European waters because the IMO has indicated it intends to introduce its own version globally in 2027.

“So, wherever you are, whatever you ship, however it is fueled, there’s a new paradigm at sea. A new lens through which to view everything from trade routes and energy choices to investment decisions: CO2e per megajoule.”

Later at the summit, Wiernicki moderated a panel of key global LNG leaders, titled LNG Shipping and the New Energy Landscape.

He said: “LNG is going to play a leading role in reaching 2050. However, for such a key fuel for the energy transition, it is important to recognize it is itself a fuel in transition. And we will need it to not only evolve but to address and mitigate the risks inherent in its operation today if we are to reach our 2050 objectives.

“LNG is the perfect example of how shipping will be an enabler of the transition as both consumer and transporter of the low and zero-carbon fuels we will need to reach 2050. All of which means the panel we have today, who represent a broad spectrum of the LNG carrier industry and value chain, will together play a significant role in the energy transition at sea.”

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