FuelEU Maritime Series – Part 1: Vessels, emissions and scope

In approximately four weeks’ time, on 1 January 2025, the new FuelEU Maritime Regulation will begin to apply to most types of vessels over 5,000 GT calling at ports across the EU/EEA.

The new rules form part of the EU’s persistent drive to reduce GHG emissions within the European airspace and they will introduce a new set of obligations and compliance requirements for the shipping sector. 

From a practical perspective, the key concern for maritime stakeholders operating in Europe will be to understand in what measure the new Regulation will impact their shipping and commercial operations.

In this new six-part bi-weekly series, we take a detailed look at Regulation (EU) 2023/1805, examining its scope, gradual implementation timeline, the obligations and compliance mechanisms it introduces; we look at where responsibility for compliance lies, the consequences for breaching the rules, and the potential legal issues that may arise amongst the parties.

The European Parliament and the European Council adopted the FuelEU Maritime Regulation ^[1] (FuelEU Maritime) in July 2023. This instrument was intended to enhance the Union’s climate commitment under the Paris Agreement and to form part of the EU’s ambitious Fit for 55 legislative package. Fit for 55, introduced in 2021, set out to achieve a reduction of greenhouse gas (GHG) emissions in the EU by a minimum of 55% by 2030, compared with 1990 levels, and contains a target for climate neutrality by 2050.

FuelEU Maritime is also intended as a complementary measure to the EU Emission Trading System (EU ETS), itself extended on 1 January 2024 to the previously excluded maritime transport sector, with the overarching aim of also reducing the maritime sector’s carbon footprint. 

The FuelEU Maritime Regulation has a two-fold objective: first, it seeks to significantly reduce the intensity of GHG emissions emanating from ships, on a well-to-wake basis, whilst at the same time encouraging the use of low-carbon and renewable fuels. A particular emphasis is placed on renewable fuels of non-biological origin, known as RFNBOs, through a specially designed incentive regime. Secondly, it introduces measures requiring passenger and container ships to use onshore power during stays in ports of over two hours.

To gain a more in-depth understanding of how FuelEU Maritime operates and of the impact it will have on maritime stakeholders trading in the EU/EEA, we will start our series this week by examining which types of vessels are covered under the Regulation, and which emissions fall under its scope. 

Next time, we will be looking at whether exemptions apply and who is responsible for ensuring compliance with the Regulation’s requirements.

VESSELS  - Which types of vessels are covered under FuelEU Maritime?

The scope of Regulation (EU) 2023/1805 (FuelEU Maritime) is set out at the beginning in Article 2(1) and covers “all ships of above 5000 gross tonnage that serve the purpose of transporting passengers or cargo for commercial purposes, regardless of their flag”.

This definition includes the following vessels, which are defined in Article 3 of FuelEU Maritime:

• Passenger ships, i.e., ships that carry more than 12 passengers, where a passenger is every person other than: (i) the master and the members of the crew or other person employed or engaged in any capacity on board a ship on the business of that ship; and (ii) a child under 1 year of age.
• Cruise passenger ships, i.e., passenger ships that have no cargo deck and are designed exclusively for commercial transportation of passengers in overnight accommodation on a sea voyage.
• Containerships, i.e., ships designed exclusively for the carriage of containers in holds and on deck.

Other cargo-carrying vessels which clearly fall within the remit of this Regulation are bulk carriers, chemical tankers, LNG carriers and all other vessels which carry cargo and/or passengers for commercial reasons, including those that combine both, such as RoPax vessels.

The vessels explicitly excluded from the Regulation are found in Article 2(7). These types of vessels are clearly defined in the FAQs on FuelEU Maritime ^[2], an extract of which is set out below:

• warships, meaning all ships operated by armed forces and used exclusively by governments for military purposes or engaged in crisis response or humanitarian relief operations.
• naval auxiliaries, meaning all vessels engaged in supply operations to military ships, including fuels and cargo, or engaged in crisis response or humanitarian relief operations.
• fish-catching or fish-processing ships, covering a large range of ships engaged exclusively in fishing activities.
• wooden ships of a primitive build.
• ships not propelled by mechanical means, excluding, however, all sailing ships that are able to be mechanically propelled.
• ships owned or operated by a government and used only for non-commercial purposes.

Other excluded vessels would be tugs and service boats, which although not explicitly mentioned, clearly do not fall under the scope of Article 2(1), as they do not transport cargo, nor passengers for commercial purposes.

Additionally, the scope excludes most offshore vessels, unless engaged in cargo/passenger transportation between ports for commercial purposes. Jack Up rigs and semi-submersible vessels, for example, will not fall under the FuelEU Maritime Regulation.

SCOPE - Which GHG emissions are targeted? Which voyages are covered?

FuelEU Maritime lays down uniform rules imposing a limit on the greenhouse gas (GHG) intensity of “energy used on board” a ship arriving at, staying within, or departing from ports within the jurisdiction of an EU/EEA Member State, irrespective of its flag state.

The GHG intensity is measured as GHG emissions per energy unit (gCO2e/MJ) and includes carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O).

The measurement of GHG intensity takes into account the GHG impact of emissions relative to the fuels during the period of their production, transport, distribution, bunkering, and use on board, including their combustion (i.e. the “well-to-wake” basis), as described in Annex I of FuelEU. 

“Energy used on board” is defined and covers the amount of energy, expressed in megajoules (MJ), used by the ship for propulsion and for the operation of any onboard equipment, at sea or at berth.

Beginning from 1 January 2025, ships operating in the EU/EEA must cover their energy needs with fuels of GHG intensity below the reference value of 91.16 gCO2e/MJ (or GHG per energy unit). The GHG intensity reference value is set to decrease by a percentage which rises gradually every five years, up until 2050:  the reduction is set at 2% from 2025 until 2029, 6% from 2030 until 2034, 14.5% from 2035 until 2039, 31% from 2040 until 2044, 62% from 2045 until 2049, and 80% from 2050 onwards.

The FuelEU Maritime GHG intensity requirements apply to 100% of energy used on voyages between “ports of call” within the EU/EEA, and 50% of energy used on voyages into or out of the EU/EEA from or to ports of call outside EU/EEA.

“Port of call” means a port where ships stop to load or unload cargo, or to embark or disembark passengers, with the exclusion of the following:

• stops for the sole purposes of refuelling, obtaining supplies, relieving the crew, going into dry-dock, or making repairs to the ship, its equipment or both.
• stops in port because the ship is in need of assistance or in distress.
• ship-to-ship transfers carried out outside ports; and
• stops for the sole purpose of taking shelter from adverse weather or rendered necessary by search and rescue activities. 

“Port of call” will also exclude stops of containerships in a neighbouring container transhipment port located outside the EU/EEA but less than 300 nautical miles from a port under its jurisdiction and where said port meets the stated unit turnover threshold, measured by reference to the share of container transhipments relative to the total container traffic.

The purpose of this measure is to avoid evasive behaviour, where containers are unloaded from a ship to a port for the sole purpose of being loaded onto another ship. The ship will need to record 50% of the energy for the voyage to that port as well, rather than only the short leg from the transshipment port to its final EU destination.

The EU Commission is required to establish a list of neighbouring container transhipment ports by 31 December 2025.

Read more on Decarbonisation of the Maritime Industry

[1] Regulation (EU) 2023/1805 of the  European Parliament and of the Council of 13 September 2023 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC Regulation - 2023/1805 - EN - EUR-Lex (europa.eu) 

[2] Question 2.1. Questions and Answers on Regulation (EU) 2023/1805 on the use of renewable and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC - European Commission (europa.eu)